September is a notoriously weak month for investors, and October also has the hallmarks of a rough patch for Wall Street, with the Nov. 3 presidential election looming

A bout of volatility returned to financial markets with a vengeance last week, disrupting what had been a nearly uninterrupted climb to records for U.S. stock indexes and raising questions about the path for Wall Street headed into a hornet’s nest of challenges.

Perhaps, the overarching question is, “What the heck just happened to equity markets in the 48 hours after the S&P 500 index SPX, -0.81% and Nasdaq Composite Index COMP, -1.26% on Wednesday notched their 22nd and 43rd closing records of 2020 respectively, and the Dow DJIA, -0.56% scored its first finish above 29,000 since February, bringing it within 2% of its Feb. 12 all-time closing high?” READ MORE HERE

WHAT IS THE TECHNICAL CHARTS SAYING?

GOLD possibly will take advantage of the global weakness to rally – but before that happens – more pullbacks ahead for gold
OIL fell more than a USD1 yesterday and more fall ahead – READ MORE HERE
SP500 breaks the support – looking for 3300 support or lower this week
DOW likewise breaks the Support and looking for new support below 27000

WHAT ABOUT THE PHILIPPINES – PSEI?

PH debt headed toward 60% of GDP by 2022

The country’s debt burden is expected to rise sharply in the next two years to reach P12 trillion by the time President Duterte steps down in 2022 as the government continues to secure more loans to fund its Covid-19 response.

Between now and 2021, the government will borrow an additional P3 trillion. The debt pile is see to hit P12 billion by the end of President Rodrigo Duterte’s term in 2022.

“The debt-to-GDP ratio is projected to settle at 54 percent this year and reach 58 percent in 2021, and 60 percent in 2022,” Finance Secretary Carlos Dominguez III said during the budget hearings which started last week.

We should see more fall this week – tandem with the Global Stock Market

KEY TAKEAWAYS

  • Corporate earnings continues to weaken and that’s not good for the market
  • Uncertainty still remains third quarter & the 4th quarter
  • Inflation falls with economy in recession –
    • Falling prices have helped cut headline inflation to 2.4% in August from 2.7% the previous month, the slowest pace in three months.
    • Last month’s inflation figure was lower than the 2.5 to 3.3% the central bank predicted.
    • Food prices rose by 1.7 percent, down from a 2.5 percent climb in July as prices of  rice, vegetables , meat and fish  decelerated.
    • “The balance of risks tilts toward the downside owing largely to potential disruptions to domestic and global economic activity of the ongoing pandemic,” said BSP Governor Benjamin Diokno.
  • We see more PSEI fragile this week

Do remember maintain vigilant in investing as the market is still fragile – we recommend good companies with solid fundamentals and good future earnings – approach investing with VALUE INVESTING APPROACH.

FINWAZE TEAM – MANG MATEO (Follow us in our facebook @ https://www.facebook.com/mang.mateo

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