High August inflation may weigh on stocks

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Local stocks are expected move with a downward bias this week because of economic headwinds that could dampen investor confidence,

Philstocks Financial Inc. research head Japhet Tantiangco said investors were expected to take cues from the upcoming August inflation data which may settle within a range of 4.8 percent to 5.6 percent. “Worries that inflation will raise again amid food and fuel price pressures could pull the market lower,” he said.

Analysts said while the August inflation might be higher than 4.7 percent in July, a steep rise could lead to fresh volatility in the market. Tantiangco said as investors were still cautious, bringing back confidence in the local economy remained challenging over the short term. China Bank Capital managing director Juan Paolo Colet said market direction would also be dictated by investors’ reaction on US jobs report, China’s efforts to prop up its economy and the Philippine inflation print. “Traders may bet on ‘bad news is good news’ as a softening US labor market, which saw a rise in unemployment to its highest since February 2022, makes the case for the US Federal Reserve to hold policy rates steady this month,” Colet said.

 

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