Shares slip ahead of Powell testimony in Congress

MANILA, Philippines — Stocks slipped anew yesterday on lack of fresh leads as markets await direction from US Federal Reserve Chair Jerome Powell.

Traders said the market remained in negative territory as  investors await the decision of the Bangko Sentral ng Pilipinas as well as Powell’s policy report to the US Congress.

The benchmark Philippine Stock Exchange index (PSEi) closed at 6,424.21, down by 24.69 points or 0.38 percent, while the broader All Shares index fell to 3,426.81, down by 12.73 points or 0.37 percent.

Total value turnover reached P5.169 billion. Decliners outnumbered advancers, 111 to 69.

Powell will testify before Congress on Wednesday and Thursday, with the world’s most powerful central banker sure to be questioned on whether rates will really rise again in July and peak in a 5.5 -5.75 percent range as projected.

Last week, the Fed held its benchmark lending rate steady, the first time in more than a year that it didn’t announce an increase. But it also warned it could raise rates twice more this year.

“The focus is on whether the July meeting is truly ‘live’ and if the Fed dot plot of two more hikes is a true base case depending on the data, or doom-mongering on inflation in an effort to ensure no premature easing in financial conditions,” said Tapas Strickland, head of market economics at NAB.

Central banks around the world are heading in diverging directions as they battle inflation amid worries about a pressured global economy.

“Investors are turning cautious ahead of another hefty dose of Fedspeak amidst a relatively light data docket,” Stephen Innes of SPI Asset Management said in a commentary.

He added that “with central banks in the mood to dish out inflation pain these days, investors may need to see some positive inflation data convergence to narrow the wide disparity between the Federal Reserve and the market’s forward inflation expectations before breaking fresh higher ground on US stocks.”

In China, meanwhile, the world’s second-largest economy is stumbling in its recovery following the relaxation of anti-COVID restrictions.