Morning Dew - 8 May 2013

Key Points

• Another strong rally took JCI just below its record high at 5062.67. A successful push above this all-time high will open up a prospect for the index to reach its next objective at 5114 and should it extend more: 5242. Support is seen crucial at 4907 as well as 4856. As the Dow also pushed above 15k mark, this holiday-shortened week looks set to end on a high note for the JCI.
• Domestic matters may weigh against the JCI especially after the S&P cut Indonesia's credit outlook to stable from positive and after Moody's issued a warning that fuel policy may hurt the economy and thus indirectly suggesting that the credit rating outlook may also be at risk. Slowdown in GDP is also a negative for JCI.
• Positive factors came from abroad as the Reserve Bank of Australia (RBA) joined the European Central Bank on cutting rates. RBA set the rate to a record low of 2.75%. Meanwhile, the Federal Reserve maintained its bond-purchasing program at $85b each month while Bank of Japan aims at reaching inflation target at 2% by adding stepping up its stimulus program. Elsewhere, the Bank of England will meet this week but it is expected to hold rates and its stimulus program intact. Another plus factor came from last week's nonfarm payrolls which beat the consensus and better-than-expected earnings in the U.S. as earnings season continues to wind down.

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