Philippine Market Outlook April 30 2019
MARKET OUTLOOK
The main index finished higher on Monday despite trading sideways for most of the session as investors remained cautious ahead of the release of economic data.
The PSEi continues to move sideways as the market is still waiting on economic data (gross domestic product, interest rates, and inflation) from the government. The announcement is scheduled this May 2019.
Investors were also said to be loading portfolios as more companies release their Q1 earnings results.
Market players fed on the positive sentiment, as local firms were gradually reporting their financial performance.
The lack of market-moving developments also contributed to the market’s lackluster performance.
The index is ranging between 7,600 and 8,200.
It’s still too soon to tell if the market will be more active today. Potential month-end window dressing could be tempered by the upcoming holiday on Wednesday.
Investors overseas had been pricing in positive results of the US GDP for Q1. The US reported that the economy grew by 3.2% year on year during Q1, way beyond the 2.3% market estimate. This also showed the fastest growth since 2013’s 3%.
Wall Street closed higher overnight, bolstering the view that the decade-long bull market has further to run, after consumer spending rose in March and inflation data was benign.
Hopes of a resolution of the US-China trade war, upbeat earnings and a dovish Federal Reserve have powered the rally in stocks this year, and even though the Monday's gains were small, strategists said recent upswings encourage further buying.
It does create pressure to bring more buyers. Today's headline augments the fear of missing out. It's going to make the bears less bearish or more worried they're going to get run over.
Tame inflation supports the Fed's recent decision to suspend further interest rate increases this year.
As trade talks enter their last leg, US negotiators head to China on Tuesday to try to hammer out details to end the protracted tariff spat between the two countries.
US Treasury Secretary Steven Mnuchin, in a television interview that aired on Monday, said he hopes that the latest talks between the United States and China may seal a trade deal.
It's really about the administration continuing to hint a trade agreement is near. People don't want to miss out on the expected rally from that news.
The Fed starts a two-day meeting on Tuesday, at the end of which a decision on interest rates will be announced.
