Fed slashes rates; index stays weak
In the near term, the election will have no effects on our policy decisions.
Federal Reserve Chairperson Jerome Powell speaks during a news conference following a Federal Open Market Committee meeting in Washington. The Federal Reserve cut interest rates the second time this year, cutting its benchmark lending rate by a quarter percentage point as they extend efforts to keep the US economic expansion on solid footing amid concerns about a weakening labor market.
Kent Nishimura/Getty Images/AGENCE FRANCE-PRESSE
The US Federal Reserve shrugged off concerns about the economic impact of Donald Trump’s election victory and moved ahead with a quarter point cut Thursday.
The Fed sits just a short walk from the White House, where Democratic President Joe Biden will in January hand back the keys to Trump following the Republican’s election win.
But as expected, policymakers did their best to ignore the political drama playing out up the road, voting unanimously to trim interest rates by 25 basis points to between 4.50 and 4.75 percent, according to a Fed statement.
“In the near term, the election will have no effects on our policy decisions,” Fed Chair Jerome Powell told reporters after the rate cut was announced, noting there was still uncertainty about what President-elect Trump’s actual economic agenda would be. “We don’t guess, we don’t speculate, and we don’t assume,” he said.
Weak growth weighs on mart
The benchmark index ended flat after shredding 37.26 points, or 0.53 percent, to close at 6,977.18.
Sectors were split, with Mining leading the gainers at 1.26 percent, followed by Property up by 0.35 percent and Industrial by 0.06 percent.
Meanwhile, the Holding Firm was the main loser, decreasing by 1.16 percent, and Financials and Services by 0.78 percent and 0.62 percent, respectively.
Converge ICT Solutions Inc. was the top index advancer, jumping 4.71 percent to P16.00. Meanwhile, SM Investments Corporation was at the bottom, falling 2.55 percent to P916. According to Japhet Tantiangco, a senior research analyst at
Philstocks Financial Inc., investors continued to price in the possible implementation of protectionist policies in the US under a Trump presidency and its negative impact on the global economy.
“The slowdown in the Philippines’ economic growth in Q3 also continued to weigh on sentiment,” he added.
The net value turnover was P5.28 billion, higher than the year-todate average of P5.18 billion. Foreigners were net sellers, with net outflows valued at P1.90 billion.
Ayala Land Inc. was the most actively traded stock at P844,451,025,down by 1.27 percent, followed by BDO Unibank, Inc. at P626,612,736, down by 0.68 percent.
The peso closed at P58.26 from 58.73 on Thursday. It opened the day at 58.45 and traded between 58.25 and 58.49. The weighted average was 58.413.