Overseas news
In the 2nd quarter of 2024, US economic growth sped up to 3% quarter-on-quarter from 1.6% in the preceding month. This came as consumer spending remained strong.
Also in the US, weekly jobless claims fell by 4,000 to a 4-month record low of 218,000 last week. This signals a fairly healthy labor market.
The S&P 500 scored a record closing high and the Dow and Nasdaq rose on Thursday as the jobless claims report eased labor market concerns.
Consumer spending and jobless claims are major factors in the overall condition of an economy, and stock market performance can reflect a country’s current and expected future economic conditions.
Local developments
The Philippines plans to borrow P310 billion from the domestic market in the 4th quarter of 2024, amid expectations of further rate cuts that could drive yields lower.
Changes in the key rate can have an effect on many investments, including Treasury bills and bonds. The coupon rate is affected directly, the price is often indirectly impacted, and together they are responsible for the yield of debt instruments.
The Philippine Stock Exchange index (PSEi) hit a new 2-year high ending at 7,458.74 on Thursday after Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona’s dovish comments.
Stocks could be more appealing to investors when policy rates go down. That’s because lower rates encourage consumers and businesses to spend more, so company earnings and stock prices could rise.
While the news is generally positive, it might be premature to take action right now. Staying updated and seeing if things really are headed upwards might be the right decision for the moment.
