Morning Dew - 7 February 2014

Eyes on Payrolls

As we enter February, earnings coming out of JCI constituents are going to steal the investors’ attention for about a month. External factors are going to be pushed aside on the sideline for a while.

On the macro side, the next big thing is the release of US nonfarm payrolls this Friday. Payrolls are seen up by 175k in January, better than the prior 74k increase in December. Unemployment rate is seen steady at 6.7% during the same period.

Better-than-expected payrolls data will bring some relief over the concern that the US economy is at risk by the Fed’s tapering policy. Job market has been one of the key determinants of Fed’s policy lately and may continue to play this role until the Fed wipes out the remaining stimulus worth $65bn.

Elsewhere, USDIDR fell further to IDR12,159 per US$ from IDR12,172 per US$. 

Jobless Claims Fell

Jobless claims fell 20k in the US in the week ended Feb 1st 2014. The 331k reading was better than the consensus 335k and was a relief for investors which saw a less-than-expected private hiring number in January.

On another front, the US trade deficit has widened 12% in December to $38.7b, worse than the expected $36b. Exports were down while imports were slightly higher as consumer demand rose.

Productivity however, was up 3.2% in 4Q13, slower than 3.6% gain seen in 3Q13.

Technically Speaking...

JCI turned higher on Thursday as the index ended up 0.92% at 4,424.

Recent lows at 4,320 and 4,286 be the nearest key supports while the next big support comes at 4,161, followed by 4,109 and 3,837.

JCI continues to struggle higher as nearest resistance is seen at 4,432, followed by another one around 4,480-4,510.

MACD has turned higher although it remains negative at the moment while RSI has started to stop its slide. Volume has curled higher. This suggests that the recent bounce may continue for some more.

Day Ahead

So far, the improving jobless claims is seen as positive for JCI on Friday. The data somehow triggered a broad-based rally both among European and American stocks. Asian stocks may be on track for similar gains, including JCI.

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