Global stocks closed November higher on the back of positive vaccine news with MSCI ACWI closing November 12% higher. Week-on-week global stock markets moved sideways to close a record-breaking month as the prospect of a vaccine driven economic recovery next year. Further, central bank stimulus measures was covered by the immediate concerns about the spiking COVID-19 cases in the major economies.

As market is also seen to be overbought, there’s a risk of near-term correction. However, markets are now in a seasonally strong time of the year and investors are yet to fully discount the potential for a very strong recovery next year in growth and profits. Over the week since Nov 20, S&P 500 +1.80%, DOW +1.28% and MSCI ACWI +1.44%.

Philippine Stocks

Philippine Stocks retreated to 6,791.46 on Friday, Nov. 30. It follows around three weeks of an uptrend, which brought the PSEi to a level that was last reached in February, before the COVID-19 lockdown started. The market corrected in the last few days last week as investors opted to profit take before the long weekend on the back of an overvalued market. Negative sentiment in the US on higher weekly US jobless claims and as investors realigned with the latest MSCI rebalancing which takes effect at the end of November. PSEi ended the week at 6,791.49, -5.28% week-on-week. The market opened December at 6,740.30 and closed at 7,009.56.

Philippine Bonds

Philippine Government Bonds boosted the Philippine bond market amid the effect of the COVID-19. This is as Treasury bills and bonds were stimulating the increase to fund stimulus measures amid the pandemic. The government bonds attracted investors as yields dropped among short-term bonds and rose in the long-term bonds. The decline in government bond yields, reverse of prices, at the shorter tenor bonds was due largely to the accommodative monetary policy stance of the Bangko Sentral ng Pilipinas (BSP) and also the benign inflation rate.