Morning Dew - 3 June 2013

Key Points

• Ben Bernanke's statement over the potential reduction in the Fed's stimulus might have been the game changer after all. The market seems to be factoring in the possibility of an end of the accomodative monetary policy period. Sell in May and go away may still applicable after all. Now, looking ahead, the better the job and growth data, the more likely that the Fed will start to unravel its stimulus program. June may not be as generous as May.
• JCI reached new heights in May, but the finishing has put optimism into question. At the final day of the month, the index plunged to hit the low of 5068. The fall was accompanied by surging volume and a further acceleration of the decline as seen on the MACD indicator. Supports are now seen at 5039 and 4989 while 4907.59 is going to be key support the coming week. In addition, a crack of prior low at 5072 is seen to open up the possibility for the index to fall towards its projected level of 5046 and 4935. Upside seen capped around 5225.08 with the subsequent resistance lies at 5251.29.
• A rather busy month of May as three recommendations were completed. BBNI managed to scoop 49.66% of gains while the other two were not so unfortunate and hit their respective stops. PNBN lost 9.41% while KPIG lost 10.81%. Added into the list of recommendations were AKRA, BSDE and BWPT, while there are two more recommendations pending to be filled: MDLN and WIIM.
• US Nonfarm payrolls data will be the key figure this coming week. As the better the data, the more likely the Fed will curtail its stimulus, the stock market may actually want to see a so-so or less-than-expected results. Payrolls data is expected at 168k, slightly up from 165k recorded a month before. Unemployment rate is seen at 7.5%, steady from a month earlier. Before the release of the nonfarm payrolls, the ADP employment will be released on Wednesday whereas private sector employment is seen to have improved to 170k from 119k. ISM data for both manufacturing and non-manufacturing are also set for release the coming week. For manufacturing sector the ISM index is expected to slip from 50.7 to 50.5 while for the service sector the index is seen improving from 53.1 to 53.5.

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