The Weekly Review

The local equity market rebounded as investors cheered the slower-than-expected August local headline inflation print of 3.3%. Market sentiment was also lifted by the strengthening of the Philippine peso.

Top performers were GT Capital Holdings, Inc. (PSE Ticker: GTCAP; +8.97%), Century Pacific Food, Inc. (CNPF; +8.32%), and Puregold Price Club, Inc. (PGOLD; +8.11%). Meanwhile, LT Group, Inc. (PSE Ticker: LTG; -3.91%), Wilcon Depot, Inc. (WLCON; -4.26%), and Manila Electric Company (MER; -4.75%) were the laggards of the week.

▲ The PSEi closed at 6,936.09 (+0.56% WoW). 

Local fixed income yields inched up as investors positioned ahead of the US nonfarm payrolls data and US inflation data. This was despite local inflation settling at 3.3%, below consensus expectations of 3.6%.

▲ On average, yields rose by 0.76 bp, with the 2Y closing at 6.02% (+1 bps) and the 10Y closing at 6.08% (+1 bps).

The Philippine peso strengthened following soft US economic data which reinforced bets of a US Fed rate cut this month. This was also after the below-consensus local inflation print in August.​

▼ The USD/PHP pair closed at 55.91 (-0.37% WoW).

The US stock market indices dropped as investors digested a series of key economic data releases which include: (1) below-consensus US Institute for Supply Management (ISM) manufacturing Purchasing Mangers’ Index (PMI) of 47.2 in August, (2) weaker-than-expected July job openings of 7.67 million, and the (3) lower-than-consensus nonfarm payroll additions of 142,000 in August.

▼ S&P 500 closed at 5,408.42 (-4.25% WoW).

▼ DJIA closed at 40,345.41 (-2.93% WoW). 

US Treasury yields fell after the lower-than-expected US manufacturing, job openings, and nonfarm payrolls data supported expectations that the US Fed could start cutting rates in its September meeting.​

​▼ On average, yields fell by 19 bps, with the 2Y closing at 3.65% (-27 bps) and the 10Y closing at 3.71% (-19 bps).

The US dollar weakened following the slew of weaker-than-expected labor data which showed a broad cooling of the US labor market. 

▼ The DXY closed at 101.18 (-0.51% WoW). 

Sources: BusinessWorld, Inquirer, Philippine Star, Manila Bulletin, Businessmirror, PSE Edge, Bloomberg, CNBC, Reuters, CNN, Wall Street Journal, Financial Times, Market Watch

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