Global and Philippine Market Update

April 3 to April 8, 2025

Global Markets

Global Stocks were in turmoil as markets digest Trump’s tariff reality.

• Global stocks plunged following President Trump’s announcement of a 104% tariff rate on Chinese imports. The S&P 500 saw a significant decline, wiping out $5 trillion in market value, while the Nasdaq entered bear market territory. The MSCI index plummeted by as much as 8.5%, marking its most substantial drop since the 2008 financial crisis. However, a relief rally emerged on April 8, after Trump declared a 90-day pause on reciprocal tariffs. In response, the Dow surged by 7.87%, the S&P 500 rebounded with a 9.6% gain, and the Nasdaq soared by 12.6%.
  
  
• The European Union has announced its own retaliatory measures against the United States, imposing tariffs on $22 billion worth of U.S. goods, including soybeans, motorcycles, and beauty products. Meanwhile, China has significantly raised tariffs on American products to 84%, prompting former President Donald Trump to escalate tariffs on Chinese imports to 125% in response.
  
  
• The sell-off in U.S. bonds has led to a surge in Treasury yields, as the ongoing trade war casts doubt on the safe-haven appeal of U.S. government debt. The 10-year Treasury yield increased by 10 basis points, reaching 4.5%, while the 30-year Treasury yield rose by 8 basis points, settling around 4.85%.

Philippine Stocks

Philippine Stocks rebounded after massive sell-off.

• The PSEi rebounded sharply on April 9, rising by 3.15% to close at 6,006.34, snapping a 3 three-day losing streak and recovering from its lowest level in two and a half years. The rally was driven by bargain hunting activities as the index held above the 5,800 support level. Investor optimism was further supported by expectations of a potential rate cut from the BSP, although analysts noted that ongoing U.S.-China trade tensions could cap the PSEi’s upside around the 6,100 level.
  
  
• The Philippine peso sinks back to 57 levels against the dollar, reflecting global market concerns following trump’s tariff announcement. Peso weakness was attributed to market panic induced by the U.S. tariffs, which heightened fears of a global economic slowdown and potential recession.
  
  
• In its latest Asian Development Outlook, ADB projects that the Philippine economy will experience robust growth driven by strong domestic demand, increased investments in social services, and significant public infrastructure development. Factors such as rising employment, higher household incomes due to minimum wage increases, remittances from overseas Filipino workers, and election-related expenditures are expected to bolster private consumption. ADB country director Pavit Ramchandran emphasized that the Philippines continues to be a bright spot in Southeast Asia.

Philippine Bonds

Philippine Bond yields showed mixed movement.

• Yields on Philippine Bonds declined across most tenors, driven by a softer-than-expected March inflation print. Average yields dropped by 2.58 basis points (bps) week-on-week, with notable decreases observed in the belly and long-end of the curve.
  
  
• The Philippine central bank is anticipated to ease its monetary policy this Thursday, leveraging benign inflation to justify a rate cut aimed at bolstering the economy despite the ongoing turbulence in global financial markets.

WD Guidance: Uncertainty leads to downside risks, but diversification and a long-term investment horizon still provide the best chance for financial success.

Sources:(1) https://blinks.bloomberg.com/news/stories/SUGFY4T1UM0W (2) https://amp.cnn.com/cnn/2025/04/09/investing/global-stock-market-reciprocal-tariffs-hnk-intl (3) https://www.bloomberg.com/news/articles/2025-04-09/treasuries-fire-sale-sends-long-term-yields-soaring-worldwide (4) https://www.philstar.com/business/2025/04/09/2434529/stocks-bounce-back-after-mondays-massive-sell-off (5) https://business.inquirer.net/518356/peso-sinks-back-to-57-level-as-markets-feel-trumps-tariff-pain/amp (6) https://www.abs-cbn.com/news/business/2025/4/9/ph-still-one-of-southeast-asia-s-fastest-growing-economies-in-2025-adb-1100 (7) https://www.bworldonline.com/banking-finance/2025/04/07/664162/yields-on-government-debt-go-down-as-inflation-slows/ (8) https://finance.yahoo.com/news/live/trump-tariffs-live-updates-us-has-moved-forward-with-104-china-tariffs-other-reciprocal-duties-go-into-effect-191201159.html (9) https://www.bworldonline.com/banking-finance/2025/04/09/664783/t-bonds-fetch-lower-rates-on-bsp-cut-bets/

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.