Overseas news
US Treasury yields rose, with the 10-year US yield at 3.537%, up for a third consecutive session. Meanwhile, the dollar gained against other major currencies and US stocks fell.
These happened as investors turned cautious going into an eventful week that includes the Federal Reserve’s (the Fed) rate decision on February 1, the monthly US jobs report due Friday, and the release of major tech firms’ quarterly earnings.
Investors widely expect the Fed will raise rates by 0.25% on Wednesday, with announcements on Thursday from the Bank of England and European Central Bank (ECB). Both are largely expected to hike by 0.50%.
Data such as incoming rate hike levels, economic conditions, and the performance of large companies are all used by investors as clues as to what might happen in the future.
Local developments
President Ferdinand R. Marcos, Jr., has signed an executive order for the Philippine Development Plan (PDP) 2023-2028. This aims to bring the country to upper middle-income status by 2025, targeting 6.5-8% economic growth from 2024 to 2028 and focusing on infrastructure projects.
Such projects can aid the economy directly, through the increase in jobs and spending power of workers, and indirectly by promoting growth in industries and locations affected by the developments.
Philippine companies are expected to generate up to P450 billion through bond issuances this year to fund expansion and repay debt, amid hefty domestic investment liquidity. This was according to the Philippine Dealing & Exchange Corp. (PDEX).
Issuing debt instruments is one way that companies can raise money. Another way is by selling equity (shares in the company), but there are many things to consider before deciding to do this.
The current cautiousness is something to be expected when upcoming news is likely to be impactful. On your end, adopting a cautious approach as well might be the best move right now.
