The benchmark index was flattish last week, higher by 0.56% week-on-week to close at 6,936.09 (up 38.55 points). The market started with a cautious note, digesting the impact of the prior week’s MSCI rebalancing and with the US markets closed for Labour Day on 2 Sep 2024 (Mon). Midweek, the PSEi mirrored negative sentiment from the international front. The US markets posted their sharpest declines since 5 Aug 2024 as concerns over the US economy sparked a tech-driven retreat. Nonetheless, the PSEi managed to erase losses as Philippine inflation came in at 3.3% y\/y for Aug 2024, below the 3.6% consensus and marking its lowest level since Jan 2024, thus providing room for the Bangko Sentral ng Pilipinas (BSP) to potentially cut rates further. Additionally, upbeat employment data buoyed the market, with the Philippines\u2019 Jul 2024 unemployment rate dropping to 4.7% y\/y from 4.9% y\/y. Investors also saw the Philippine Peso (PHP) strengthening against the US Dollar (USD), closing at PHP56.37, from the year-to-date high of PHP58.87 in Jun 2024.<\/p>\n\n\n\n
This week, we expect the local market to trade downwards on the absence of positive leads and amid heightened recessionary fears from lower-than-expected US jobs data. US markets saw large drops last Friday as weak initial jobless claims and nonfarm payroll data reignited fears of a hard landing for the US economy. In addition, the market will digest slightly more expensive US wholesale prices in Aug 2024, with the PPI expected to expand m\/m to 0.2% from 0.1% in Jul 2024. <\/p>\n\n\n\n
Downside, however, may be capped with the market expecting US inflation to decline to 2.6% in Aug 2024 from 2.9% in Jul 2024 and 3.7% in Aug 2023. Further, local consumers may see some relief as oil prices go back down, with gasoline prices expected to drop between PHP1.00 to PHP1.30 per litre, diesel by PHP1.00 to PHP1.30 per litre, and kerosene by PHP1.20 to PHP1.35 per litre.<\/p>\n\n\n\n
Recommendation<\/strong><\/td>| Trailing Stop<\/td><\/tr> | 1-Year Target Price<\/strong><\/td> | PHP 37.50<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n | <\/div>\n\n\n\n CNPF recently broke out of its wide range between PHP32.0-PHP37.0 following a sizeable 50% run-up from it breakout in August 2023. Key moving averages (50-day, 100-day, and 200-day) have also started trending upwards, while momentum indicators MACD and RSI are hovering around bullish zones, signaling the resumption of an uptrend. However, for those with positions, we suggest implementing trailing stops to secure gains.<\/p>\n\n\n\n Implementing trailing stops is advisable. Investors who want to accumulate CNPF may enter around established support areas or once a visible technical pattern has formed.<\/p>\n\n\n\n <\/div>\n\n\n\n 2. Universal Robina Corp. (URC)<\/h3>\n\n\n\n
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