November

29

The Gist

A daily dose of market updates and smart investment strategies to guide your portfolio decisions
Today's Report
market snapshot 11.29

Your Morning Fix

  • The S&P 500 pared its monthly gain as Fed Bank of St. Louis President James Bullard said markets may be underestimating the chances of higher rates, while his New York counterpart John Williams noted policymakers have more work to do to curb inflation. Fed Vice Chair Lael Brainard said the string of supply shocks is keeping inflation risks elevated.
  • West Texas Intermediate (WTI) rose by 1.3% to settle above USD 77 per barrel as OPEC+ delegates said deeper production cuts could be an option when they meet this weekend. Earlier in the session, oil prices slumped below USD 74, the lowest since December, as protests over harsh anti-COVID measures erupted across China, triggering a broad selloff in commodities and equity markets.
  • S&P Global Ratings revised its Philippine economic growth forecast upward to 7.1% this year from the 6.3% estimate it gave last September, but sees slower growth in 2023 at 5.2% due to the impact of higher interest rates and elevated inflation.
  • Data from the Philippine Statistics Authority (PSA) showed the general wholesale price index (GWPI) jumped 8.2% year-on-year, brought about by the higher annual uptick in the index for chemicals, including animal and vegetable oils and fats.

Our Portfolio Recommendation

With the recent moves in the markets and the depreciation of the Philippine peso, we recommend a reduction in the allocation for equities and peso-denominated investments. For long-term investors, however, equities may still be a strategically good option, though the short-term to medium-term outlook remains in limbo over the next 12 months. Recession fears in developed markets and reduced business profitability brought on by soaring inflation have put a damper on stock market returns. With markets pricing in rising interest rates, the upside potential of fixed income investments seems to be much more attractive. We advise clients to keep a moderately aggressive stance over the next 6 to 12 months. Periodically monitoring the very fluid conditions in the market is needed.

ASSET-ALLOC-7.8.2022-v2
2022 Metrobank Forecast 2023 Metrobank Forecast
GDP
7.2%
6-7%
Inflation
5.8%
4-6%↑
BSP Overnight Rate
5.5%
5.75%-6.25%
USD/PHP Trend
58.20↓
59.60↓
CHART OF THE DAY
Chart of the Day

China’s COVID blues

The rebound for China’s stock indices faces a hurdle as the protests added to the uncertainty about China’s direction amid rising COVID cases. This adds to the pressure on local officials to step up against President Xi Jinping’s strict zero-COVID policy. The increasingly muddled outlook for China’s economy also weighed on the renminbi. The Chinese currency fell by as much as 1.1% to RMB 7.24 against the US dollar. Source: Reuters, Bloomberg

COTD MOBILE 11.29 COTD DESKTOP 11.29
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DISCLAIMER: The report above is circulated for general information only. The opinions expressed are solely those of the contributors and are based on prevailing market conditions and public sources that are believed to be reliable. Metrobank and the report contributors/support staff do not make any guarantees or representation as to the accuracy, completeness or suitability of this report. The report may contain confidential or legally privileged material and may not be copied, reshared, redistributed, or published without prior written consent. Opinions or strategies contained in this publication may change without prior notice and should not take the place of professional investment advice or sound judgment on the part of the reader.