Overseas news
US stocks closed lower after 3 days of gains. Meanwhile, US Treasuries strengthened, with the 10-year yield declining to around 2.59%, the lowest since April 2022. These happened as data showed slower growth in the US manufacturing sector amid aggressive Fed tightening.
Monetary policy tightening can cause business difficulties because the higher interest rates make borrowing more expensive for companies that may need additional money to grow.
The Kingdom of Saudi Arabia (KSA) will push OPEC+ to increase oil production at an upcoming meeting on August 3. West Texas Intermediate crude fell 4.8% to $93.88 per barrel.
OPEC+ is a group that combines the 13 members of the Organization of the Petroleum Exporting Countries (OPEC) and 10 of the world’s top non-OPEC oil-exporting nations. It controls over 50% of global oil supplies and 90% of proven oil reserves.
Prices of oil are subject to supply and demand. So, when production goes up, prices go down.
Local developments
The Philippines’ Manufacturing Purchasing Managers Index (PMI) in July was 50.8, lower than the previous month’s 53.8. This happened as the country experiences fresh reductions in both output and new orders, and weaker foreign demand.
PMI is an index that shows if market conditions are seen as expanding, staying the same, or contracting. It is the result of a monthly survey among purchasing managers in the manufacturing and service sectors.
A Bloomberg survey of economists yielded a median forecast of 6.1% for the country’s July inflation rate, which be announced this Friday, August 5. Meanwhile, a BusinessWorld poll of 14 analysts revealed a median estimate of 6.2%.
Inflation estimates take a lot of factors into account, including the measures that the central bank implements to keep it under control. If the actual figures are higher than the estimates, this could be a sign of upcoming difficulties for the economy.
The news isn't clear about where the markets are heading. For now, staying cautiously optimistic while avoiding big changes to your portfolio might be the best strategy for you.
