Inflation top of marts’ agenda
Investors shrugged off the latest indicator of persistent inflation, as Commerce Department data showed the personal consumption expenditures price index jumped 1 percent
Several inflation reports are taking the limelight. July inflation locally will likely rise to 6.3 percent from 6.1 percent in the previous month.
On top of pricey energy, food inflation is also on the uptick after firms announced price increases for bread and canned goods, ING Senior Economist Nicholas Mapa said.
Red hot inflation will likely keep up the pressure on the Bangko Sentral ng Pilipinas to hike policy rates at the August policy meeting.
A similar theme is playing out in Korea where consumer price index (CPI) inflation will likely rise further to 6.3 percent vs 6 percent in June, on the back of rising agricultural and utility prices.
“We expect to see some signs of price stabilization however as the month-on -month growth should slow after gasoline and rental prices declined last month,” ING noted in a report.
Strong week for Wall Street
Wall Street stocks also finished a strong week on a positive note Friday, extending its rally to three days behind strong gains from Amazon, ExxonMobil and other giants following earnings results.
Investors shrugged off the latest indicator of persistent inflation, as Commerce Department data showed the personal consumption expenditures price index jumped 1 percent in June compared to May, outpacing personal income gains, which rose just 0.6 percent.
Stocks continued to push higher, rising again after the Federal Reserve’s second straight 75 basis point increase and negative gross domestic product GDP data suggesting a heightened risk of a US recession.
“The Fed has a clear path to continue with aggressive hikes, but many are still thinking they’ll be inclined to go at only a half point in September,” Oanda’s Edward Moya said.
The broad-based S&P 500 finished at 4,130.29, up 1.4 percent for the day and 4.3 percent for the week.
The Dow Jones Industrial Average climbed 1.0 percent to 32,845.13, while the tech-rich Nasdaq Composite Index jumped 1.9 percent to 12,390.69.
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