Strong Q2 corporate profits lift PH stocks

By Jenniffer B. Austria

LOCAL stocks ended the week in the green on strong foreign buying and expectations of strong second-quarter earnings.

The composite Philippine Stock Exchange index gained 34.06 points, or 0.51 percent, to close at 5,547.56, while the broader all-shares index climbed 14.99 points to finish at 3,530.90.

Philstocks Financial research analyst Claire Alviar said prospects of favorable second-quarter earnings boosted investors’ sentiments.

Alviar said the narrow balance of payments deficit in June and the

PSEi July 21, 2023

Top Gainers

robust foreign buying contributed to the positive sentiments.

Foreign investors were net buyers by P372 million, boosting total value turnover to P4.55 billion.

Meanwhile, Asian equities wobbled Friday at the end of a draining week as fresh US jobs data put revived bets on two more Federal Reserve interest rate hikes, adding to ongoing worries about China’s economy.

Investors have largely been on the back foot since Monday, when Beijing announced a big miss on second-quarter growth that indicated the post-Covid recovery had come to a juddering halt.

The uncertainty in Asia followed a sell-off in New York, where tech titans were hammered after earnings reports from Netflix and Tesla disappointed. This week’s stumble follows a rally last week when a faster-than-expected slowdown in US inflation stoked hopes the Fed could end its rate hikes after July’s meeting while also avoiding a recession. But confidence took a knock Thursday when fires showed a surprise drop in US jobless claims last week, suggesting the

Top Losers

Most Active

labour market remained resilient.

While data has recently pointed to a weakening in the US economy that would help ease inflation, the Fed has said it needed to see more softening in the jobs sector.

Christian Scherrmann at DWS Group said: “While the ongoing disinflationary progress surely looks ‘promising’, it would appear that policymakers still want to see some more ‘good’ data on inflation as well as some further signs that labor market imbalances are abating.

“Only then would the (policy board) seem inclined to shift towards a prolonged ‘wait-and-see, datadependent, higher for longer’ mode.

Japan’s consumer price index rose to 3.3% in June

TOKYO—Japan’s consumer prices rose 3.3 percent year-on-year in June, with the pace of inflation accelerating from the 3.2 percent recorded in May, government data showed Friday.

The latest data -- which matched market expectations -- comes ahead of the Bank of Japan’s monetary policy meeting next week.

Most market watchers expect the central bank to keep its super-loose monetary easing policy in place.

Stripping out fresh food and energy, Japan’s prices rose 4.2 percent, data published by the internal affairs ministry showed.

Friday’s core consumer price index figure matched the market’s expectations of 3.3 percent recorded in a Bloomberg survey.

“The current strong reading of CPI doesn’t mean the BoJ will make major policy changes,” Masamichi Adachi,

Google

SAN FRANCISCO, United States—

Google is working with news publishers to design a new AI-backed tool to help journalists report and write their stories, the company said on Thursday.

The project was first reported by The New York Times, which is working with The Washington Post and The Wall Street Journal in testing the new product.

Citing anonymous sources, the report said the tool—known internally as Genesis—was in an early testing stage, but impressive enough to be found “unsettling” by some of the news executives that saw its capabilities.

A Google spokeswoman said in a statement that “in partnership with news publishers, especially smaller publishers, we’re in the earliest stages of exploring ideas to potentially provide AI-enabled tools to help their journalists with their work.”

She added that “quite simply, these tools are not intended to, and cannot, replace the essential role journalists have in reporting, creating and factchecking their articles.”

The tool would function as a sort of co-pilot for reporters and editors by providing options for headlines or different writing styles, the company said.

The Google project follows news of a tie-up between OpenAI and The Associated Press, in which the ChatGPT creator was given a license to use the archives of AP going back to 1985 to train AI. AFP economist at UBS Securities, told Bloomberg.

“It’s pretty clear that inflation will slow from here as import-driven price gains taper off.”

While electricity prices declined again in June, processed food prices rose, the ministry said.

Inflation in Japan has been less extreme than price hikes seen in countries such as the United States, which have been fueled by the war in Ukraine and supply-chain disruptions.

The US Federal Reserve and many other central banks have raised interest rates to tackle high inflation.

But the Bank of Japan has stuck to its long-standing, ultra-loose monetary policy in an attempt to boost economic growth, causing the yen to fall against the dollar.

Only a minority of analysts expect the central bank to tweak its policy when it meets next week, Bloomberg said.

The Bank of Japan’s two-percent inflation target, which it hopes will lead to sustainable growth in the world’s third-largest economy, has been surpassed every month for more than a year.

But the central bank sees recent price rises as driven by temporary factors, and so has stuck to its easing policies such as a negative interest rate.

Earlier this year, the Bank of Japan announced a broad review of its “nontraditional” attempts to banish the deflation that plagued Japan since the 1990s.

But moving away from monetary easing will be a tricky balancing act for the bank’s governor, Kazuo Ueda, who faces pressure to normalize policy while minimizing any shock to the economy. AFP

Therefore, we also do not expect that Fed officials reverse their clear hawkish stance at the upcoming meeting.”

SPI Asset Management’s Stephen Innes said that while there was a good chance the economy will avoid contraction while the Fed brings inflation down, traders remained cautious.

“For now... investors are likely waiting on further evidence of soft landing dynamics to come into play -- resilient growth met with a further softening in wage and price inflation,” he said.

He added that would suggest “the economy is coming into better balance.” With AFP

Biden promises ‘American dream’ in shipyard speech

PHILADELPHIA, United States—

President Joe Biden on Thursday visited a shipyard symbolizing the industrial boom he hopes will put wind in his re-election campaign’s sails, even if polls show most Americans cool on him continuing as their economic captain.

The Democrat’s pitch at the Philly Shipyard in Philadelphia, Pennsylvania, was simple.

“Bidenomics is just another way of saying, ‘restore the American dream,’” he said. “This is a new day.”

What he calls “Bidenomics” revolves around bringing back manufacturing after decades of offshoring and the hollowing out of industrial towns.

It’s a strategy kick started by the Inflation Reduction Act, which poured almost $500 billion in spending and tax breaks into green energy, as well as other legislative wins that are funding infrastructure and semiconductor development.

The main focus of this path back to industrial might is in high-tech areas like microchips and clean energy.

At the Philly Shipyard, Biden viewed work on steel plates going into a ship for use in building ocean wind farms.

“When I think climate, I think jobs, I think union jobs,” Biden said to cheers from the audience at the shipyard. “We’re creating jobs in America and we’re exporting American products.”

More generally, Biden can point to a surprisingly strong, stable recovery from the Covid pandemic-induced slump. Not only has the US economy defied a chorus of warnings that recession is around the corner, but the once shocking surge of inflation is being tamed and, at three percent, is already lower than in other major economies.

That’s a scenario the 80-year-old president hopes will power him to reelection next year. Not by coincidence, Pennsylvania is one of a handful of swing states that will decide the result in a close race—potentially a rematch against the man Biden defeated in 2020, Donald Trump. AFP