Merkado Barkada
January 13, 2025 | 8:33am
The year is already 3.5% gone. Life happens fast! Let’s take a look at what’s happening this week.
> PH: We start the week with CREIT’s Q3 dividend payment, so there will be a few extra pesos floating around the exchange. Unfortunately, that’s it for scheduled domestic news.
> International: On Thursday we get CPI data from the US for the month of December, and then on Friday we will get a jobs report. These are becoming more important now that concerns are rising that inflation is picking up again and that there may be far fewer interest rate cuts in FY25 than previously expected.
MB BOTTOM-LINE: From a PSEi perspective, we’re at a level (~6,500) that should be fairly familiar to investors. We started 2024 at 6,550. We started 2023 at 6,586. Both those years, the PSEi would go on to slump at least 10% lower from that point (2023’s fall happened from January to September; 2024’s happened from January to May) before pushing back up to the starting position. My feeling is that we’re heading into a period of uncertainty. Whether that’s going to be the garden-variety uncertainty that grips the market from time to time, or whether it will be outright chaos, I can’t tell. Even if I ignore the political noise coming from the US and all of Trump’s marginally-insane geopolitical ramblings, I can’t ignore what’s happening in gold, the US dollar, and bond yields. The Fed’s mantra through the whole inflationary crisis was “higher for longer”, and it’s becoming clearer that the size of the celebration at the Fed’s original pivot could have been inflation’s “Mission Accomplished” moment. Inflation isn’t dead, and there are a lot of metrics coming out of the US that would actually seem to suggest that rates might need to be raised to cool off what seems like an overly-hot economy. But raising rates to suppress the cost of labor is definitely a choice, and all choices have consequences. Now fold the Trump shenanigans back into the mix and I have no idea what to think. I’ll just borrow a line from Vitruvius the wise: “Cover your butt.”
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