Market Outlook

Investors will highlight the Fed’s 50bps rate cut, as well as BSP chief Remolona, Jr.’s stance for ‘significant reduction’ in banks’ reserve requirements.

Participants will monitor a firmer momentum trend as the PSEi fortifies the 7,000 level, with the return of some fund managers from their Mid-Autumn Festival break.

The PSEi rose by 1.25% w/w to close at 7,022.85 (+86.76pts).

Investors may stay glued to FOMC’s 17-18 September meeting, with mixed views on whether the Fed would support either 25 or 50bps rate cut.

Higher sessions are seen, as expectations build for an expected rate cut from the Fed’s meeting next week.

Local equities might take its cue from Wall Street’s rise, as expectations are strengthened for the Fed’s possible 25bps rate cut next week.

The index saw a wide trading range yesterday treading the 7100s territory at its peak and it closed off just around resistance levels at 6984.83 (+0.01%).

The PSEi closed up 41 basis points at 6,936.09, indicating resilience at recent peak levels.

The index has been moving sideways these past few days with the bulls keeping it afloat within range, closing just above the 6900s level.

The index has been moving sideways these past few days although it seems that the bears are beginning to take over as consecutive red candles fill the chart.

The mood could sway to Wall Street’s sharp decline, but several are likely to seize on this opportunity to position.

Light trades may persist, with some fund managers on the US Labor Day holiday.

Expectations for slower August inflation would strengthen expectations for policy easing from BSP, supporting deceleration in business costs.

The PSEi slipped by 0.93% w/w to close at 6,897.54, snapping a three-week winning streak after failing to breach the 7,000 level.

The index slipped -0.96% to 6,891.55, but momentum is still kicking, with RSI at a solid 60.43.