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Overseas news
Major US stock indices closed at record highs for the 2nd straight trading day on Monday. This was driven by a possible US-China trade deal, strong tech earnings, and an expected interest rate cut by the US Federal Reserve (the Fed).
Data such as interest rate changes, economic conditions, and the performance of large companies are all used by investors when trying to forecast what might happen in the markets.
Meanwhile, US President Donald Trump said a decision on the next Fed chair might be made by the end of the year.
Shortlisted candidates include Trump’s aide Kevin Hassett, former Fed Governor Kevin Warsh, current Fed Governor Christopher Waller, Fed Vice Chair for Supervision Michelle Bowman, and BlackRock executive Rick Rieder.
The Fed chair is primarily responsible for carrying out the mandate of the Fed, which is to achieve its targets of maximum employment and price stability.
Local developments
The Philippine Stock Exchange index (PSEi) ended lower on Monday as selling activity ramped up and as the peso reached its weakest level against the dollar this year.
This index typically reflects the state of the local stock market and may hint at investors’ outlook for the future.
Additionally, the Bureau of the Treasury (BTr) raised the volume of Treasury bills (T-bills) it awarded as yields fell across all term lengths. Strong demand was seen due to expected rate cuts both locally and in the US.
Changes in the key rate can have an effect on many investments, including Treasury bills and bonds. Investors may seek to purchase securities before yields drop further due to the anticipated rate cuts.
Meanwhile, Fitch Ratings maintained its 2025 economic growth forecast of 5.6% for the Philippines, citing stable fundamentals and continued policy support.
Economic growth is measured by tracking changes in the gross domestic product (GDP), which is the value of everything a country produces in a given period.
With the mix of positive and negative developments in the news, you may want to wait for more concrete signals of change before making major modifications to your portfolio.
