The Composite Stock Price Index (IHSG) witnessed a decline of up to 1% during the second session of trading on Friday (March 15, 2024), following three consecutive days of reaching its all-time high.
As of 2:26 PM WIB, the IHSG fell by 1.01% to 7,358.334. The index corrected towards the psychological level of 7,300 after three consecutive days of reaching its all-time high.
The trading value of the IHSG during the second session today reached Rp 7 trillion, involving 9.6 billion shares transacted 735,454 times.
The decline in the IHSG occurred after three consecutive days of reaching its all-time high, prompting investors to start realizing their profits today. Moreover, today being the end of the week, there is a potential for profit-taking actions.
Furthermore, the IHSG correction followed global stock market trends, amidst the resurgence of inflation in the United States (US).
Yesterday, the US Producer Price Index (PPI) for February moved higher than market expectations. The persistent rise in PPI data could trigger prospects of the Federal Reserve (The Fed) cutting interest rates in June.
Meanwhile, the US Consumer Price Index (CPI) rose by 3.2% in February, slightly missing the market's expectation of 3.1%, which was slightly lower than the 3.1% in January.
Additionally, the number of Americans filing for unemployment claims reached 209,000 for the week ending March 9. This figure decreased compared to the previous week's 210,000 claims and was inversely related to the consensus projection of an increase to 218,000 claims.
On the other hand, US retail sales for February 2024 yielded 1.5% year-on-year (yoy), surpassing market expectations based on Trading Economic data of 1% yoy.
Overall, these data indicate the resilience of the US economy. Positive retail sales growth, coupled with rising inflation and declining unemployment claims, suggest a robust economic performance. However, this could have different implications for The Fed's interest rate cut prospects.
According to the CME FedWatch Tool calculation on early Friday morning (March 15, 2024), there is a 99% probability of interest rates being held at the March FOMC meeting, while the probability of an interest rate cut in June stands at 54.5%. This represents a decrease compared to the previous week's nearly 60%.