Last week, foreigners pulled back from the PSEi in both peso terms (net selling of P0.5 billion) and volume, but the PSEi held its ground and didn’t threaten to dip below 7,200 so the precious 7,000 line was never in jeopardy. But as they say, it’s a market still looking for a catalyst, which means that it’s a market that is now in search for a justification to move higher.
> PH: The week starts with the Arthaland [ALCO 0.42 unch; 18% avgVol] preferred shares offer today (Monday). The ex-date for DDMPR’s Q2 dividend is on Wednesday (so if you want that div, you need to own the shares by the end-of-day on Tuesday). Then, on Thursday, PHINMA [PHN 20.00 unch; 261% avgVol] will “price” its stock rights offering (the literal price of each share, plus the entitlement ratio). We end the week with a non-trading day to observe All Saints’ Day.
> International: We get Q3 GDP info for the US on Thursday morning (median forecast is 3.2%, then jobless claims data on Friday morning. The only central bank decision that matters this week (IMO) is the Bank of Japan, which will announce on Thursday.
MB BOTTOM-LINE: Will we get that justification to move higher? This week feels like mostly administrative events on the domestic side, plus it’s a holiday-shortened week and those are almost always a lot less interesting than normal. Internationally, my sense is that investors are bracing for bad news, or if not bad news, then managing their expectations for the velocity of the Fed’s pivot. I’ve seen a lot of news about banks questioning the Fed’s decision to cut 50 basis points, and there seems to be an associated fear that public questioning may make the Fed less brave when it comes to making its next rate decision on November 6. You know, the day after the US election, which itself could be the cause of some (justifiable) market jitters.
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