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Overseas news
Major US stock indices climbed Monday, led by the tech-heavy Nasdaq, as investors bought up prominent tech stocks.
This happened despite concerns over a possible US government shutdown as well as remarks from a US Federal Reserve (the Fed) official stating a “restrictive” monetary policy is needed to manage inflation.
Meanwhile, economists project that China’s factory output shrank for a 6th consecutive month in September. They also forecast that the Purchasing Managers’ Index (PMI) slightly went up to 49.6 from 49.4 in August.
However, a PMI below 50 still signals that market conditions are contracting, while only a reading above 50 would indicate expansion. This prompted calls for more economic aid amid stalled US trade negotiations.
Local developments
The Department of Agriculture (DA) plans to extend the rice import ban by at least 30 days, or possibly until the end of the year. The planned move is meant to support local farmers amid a decline in the farmgate prices of palay.
Farmgate price is the price received by farmers for the sale of their produce. Changes in such prices can end up affecting consumers and the inflation rate.
Additionally, the peso fell to a 2-month low of P58.145 against the dollar on Monday, down 4.5 centavos from Friday. Investors likely lowered their expectations for another Fed rate cut following recent economic data.
US interest rate decisions are widely watched by investors globally due to their potential effects on investment performance, the strength of the dollar against other currencies, and the overall health of the world’s largest economy.
Further, the Philippines’ external debt payments fell by 6.2% to hit $6.72 billion in the 1st half of the year due to fewer maturing foreign loans. This was according to preliminary data from the Bangko Sentral ng Pilipinas (BSP).
Debt servicing covers the money needed to pay the principal and interest on a loan for a certain period. Payment amounts can change when interest rates aren’t fixed for the entire term.
The latest news is mixed and may prompt many investors to adopt a wait-and-see approach. You can also choose to continue following your strategy until you see more definite signs of major changes.
