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Overseas news
Major US stock indices ended at record highs on Thursday, mainly due to a rally in tech shares. This happened as investors continued to wait for jobs data amid the ongoing US government shutdown.
Labor data matters to investors since it is used as an indicator of economic health and can help policymakers decide what to do with interest rates. The shutdown will likely delay the release of such reports.
Meanwhile, gold prices dropped Thursday from earlier record highs. This followed cautious remarks on rate cuts by Lorie Logan, president of the Federal Reserve Bank of Dallas, prompting spot gold to dip 0.5% and December futures to fall 0.8%.
The spot gold price is the price at which gold can be bought and sold right now. On the other hand, futures are contracts to buy or sell a commodity for a certain price at a specified date.
Gold is considered a safe haven asset, and so it tends to see increased demand during times of uncertainty or in anticipation of rate cuts.
Local developments
Headline inflation in September likely rose to a 6-month high, driven by higher food and fuel prices. However, it is expected to remain within the 1.5%-2.3% range forecast by the Bangko Sentral ng Pilipinas (BSP).
Price changes in the Consumer Price Index (CPI) determine headline inflation. CPI is a standard “basket” of goods and services that a typical family spends on.
Manageable inflation can give the BSP room to cut interest rates further or keep them steady. These changes matter to investors since they influence loan and deposit rates, bond yields, and even the performance of other asset classes such as stocks.
Additionally, local stocks slightly rose Thursday, lifted by bargain hunting, a stronger peso, and upbeat sentiment on anticipated US rate cuts. The Philippine Stock Exchange index (PSEi) grew 0.22% and the broader index was up 0.12%.
Further, the national government will use P10 billion from a World Bank-backed 2026 infrastructure program to enhance farm-to-market roads and rural value-chain facilities like post-harvest and cold storage infrastructures.
Such projects may help improve available supplies from this economically significant industry.
Today’s news is mostly positive, though the US government shutdown brings uncertainty. It might be wise to remain cautious and avoid making big changes to your portfolio for now.
