US bans semiconductor sales to China and Russia, S&P 500 falls again

The United States market appears to continue to decline. The S&P 500 index experienced a correction of -3.29% throughout last week. This decline is still the impact of the Fed's statement that it will continue to increase interest rates to deal with inflation. Apart from that, a decline also occurred in semiconductor stocks after the United States banned NVIDIA from selling some of its products to China and Russia because of their potential use for military purposes in those countries. As a result, NVIDIA ($NVDA) fell as much as -16%, followed by AMD ($AMD) -12%, and Intel ($INTC) as much as -6.4% over the past week.

 

Official fuel prices have risen, putting even more pressure on people's purchasing power

The government increased the price of Pertalite to IDR 10,000/liter (previously: IDR 7,450), Solar (Solar) to IDR 6,800/liter (previously: IDR 5,150/liter), while the price of non-subsidized Pertamax is now at IDR 14,500 (previously : Rp. 12,500). In the current economic cycle, the direct impact of the current price increase is more severe for the purchasing power of the middle class, especially those who work in the formal sector because salary increases have not yet been realized. The dynamics in the lower class segment are more interesting as job creation in the informal sector should accelerate as the reopening of the economy continues. Apart from that, there is also the government's decision to provide more direct cash assistance to look after the low-income segment.

 

Indonesia's Purchasing Manager Index (PMI) in August reached 51.7

The Purchasing Manager Index is an indicator of a country's economic activity, where a survey will be carried out on purchasing managers from various business sectors. PMI can be used as an indicator because when making a purchase, purchasing managers will look at future economic trends, where if they see that the economy is improving, they will make more purchases to meet demand, and vice versa. The PMI figure in August which reached 51.7 (Economy is contracting < 50 < Economy is expanding) was driven by strong domestic demand, while demand from exports continued to contract for three consecutive months.

ANALYSTS CERTIFICATION

The views expressed in this research report accurately reflect the analysts’ personal views about any and all of the subject securities or issuers; and no part of the research analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.

DISCLAIMERS

This research is based on information obtained from sources believed to be reliable, but we do not make any representation or warranty nor accept any responsibility or liability as to its accuracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general circulation. Any recommendations contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is not and should not be construed as an offer or a solicitation of an offer to purchase or subscribe or sell any securities. PT. Surya Timur Alam Raya or its affiliates may seek or will seek investment or other business relationships with entities in this report.