Global and Philippine Market Update

Global Markets

Global Stocks posted some gains as earnings season begins.  

Tesla beat analysts’ expectations for the first quarter of 2022. Automotive revenue was up by 87% from the same period last year. Revenue growth was primarily driven by an increase in both the number of cars sold and average price. The company is confident that they can achieve a 50% revenue growth rate for 2022. However, supply chain constraints remain a major concern

US Federal Reserve (Fed) board member Christopher Waller stated that getting inflation under control will require raising rates at a faster pace. He prefers a 0.50% increase in May and possibly similar hikes in June and July. The aggressive hikes do not come as a surprise to investors as these were already priced in by the market. 

Philippine Stocks

Philippine Stocks  rallied on renewed optimism toward Philippine growth. 

The International Monetary Fund (IMF) revised its Philippine GDP growth forecast to 6.5% from 6.3%. Ragnar Gudmundsson, IMF resident representative in the Philippines, believes that the recovery momentum will strengthen in 2022 due to the weaker than expected impact of the Omicron variant. He also mentioned that the implementation of structural reforms could contribute to increased productivity and achievement of higher growth targets.

The National Economic and Development Authority (NEDA) is pushing to shift the entire country to Alert Level 1. This will allow for more jobs and income opportunities as unemployment in the country remains among the highest in emerging Asia. NEDA also stressed the need to resume face-to-face classes as this will allow parents to return to full-time employment.

Philippine Bonds

Philippine Bond Yields moved higher as rates for bonds with a maturity of 6 months and longer increased by an average of 0.10%. 

The Bureau of Treasury (BTr) fully awarded a re-issued 7-year bond with a remaining life of six years and three months at an average yield of 5.779%. This was higher than the 5.601% yield issued last March 22. The government made the full award due to the US Federal Reserve (Fed) indicating more aggressive rate hikes.

FWD Guidance: Geopolitical tensions lead to volatility and downside risks, but diversification and a long-term investment horizon still provide the best chance for financial success. 

Sources: (1) https://www.cnbc.com/2022/04/20/tesla-tsla-earnings-q1-2022.html (2) https://www.cnbc.com/2022/04/13/feds-waller-sees-likelihood-of-multiple-half-point-interest-rate-hikes-ahead.html(3) https://business.inquirer.net/346113/imf-sees-ph-returning-to-pre-pandemic-growth-in-2024 (4) https://business.inquirer.net/346032/neda-pushes-for-nationwide-alert-level-1-to-spur-more-employment (5) https://www.bworldonline.com/banking-finance/2022/04/20/443115/govt-makes-full-award-of-bonds-at-higher-rate-on-inflation-fears/ 

Disclaimer: The purpose of this article is to inform and should not be taken as an advice or offer to purchase securities. Seek professional advice before making a decision based on this presentation. Information given does not represent the views of FWD and its agents and employees.

The information here is compiled from various credible sources and is a summary of a particular period only. Though we strive to provide accurate and complete information, we cannot guarantee that this article will be error-free.