PSEI - Bounce

After closing at a loss for 9 consecutive sessions, PSEI bounced back from its lowest of 7,206.04 yesterday to 7,227.37 today., an increase of 66.46 points or 0.94%. Can the PSEI sustain its rally next week? Here are the things to consider:

1. US Elections

A lot of volatility in the market are caused primarily by the uncertainty of the US elections. As the election draws near, the lead between Trump and Clinton is already narrowing, and the market is still not sure what would happen in a Trump leadership. So the growing uncertainty makes investors nervous about what would happen to US in case Trump wins, especially with his tightened policies: building a wall along US-Mexican Border, and his plan to increase tariffs on imports by the US.

While a Clinton win will provide a safe ending for the market, we still have to wait for the election result to know what is going to happen. But as far as PSEI is concerned we need Clinton to win to continue the rally.

2. Brexit may be postponed

Because of an earlier ruling of the court that the parliament should have the final say with regards to the exit of Britain to the EU, there is uncertainty whether Prime Minister May can activate Article 50 in 2017 and even having the possibility of cancelling the whole brexit, because she has only a small minority in the parliament. Although she is taking up the case to the supreme court to appeal.

3. More Financial Reports

We can expect more company submitting their reports next week especially since the deadline is already near. Although we're still waiting for more Financial reports, especially from the companies under PSEI. As of now the reports of SECB and BDO already saw an increase in their Earnings with the exception of MBT slowing down. We're still waiting for the FS of Ayala group of companies, SM Group and the majority of the Index. Investors are hoping for a good earnings report for the bourse.

4. Oil & US Stocks

Oil is still down for a sixth consecutive days if it stay and close in red today. OPEC is still dealing with oversupply of Oil and Oil Producing company like Riyadh threatened to raise more output, further dragging oil prices down. US stock in the other hand opened flat and may end its losing streak if it closes green today. A bounce in US stocks may drive investors optimism on Monday next week.

5. Manny winning/ Bonus week

Yes! We need Manny to win, this could boost local investors to trade more and buy more especially now that a lot of companies are giving out 13th month bonuses already. More supply = more demand.

Congrats Manny!

There still a lot of factors to consider but these are my top consideration for next week. In summary, we can expect a bounce rally for the PSEI next week and investors can take an advantage for a short up-swing.