The State of the Nation Address, an expected rate hike by the US Federal Reserve, and corporate earnings are seen to influence what is seen to be volatile trading at the local stock market this week.

“Next week, we expect the local market to start on cautious trading as investors await the State of the Nation Address for clues on the local economy’s direction,” said Philstocks Financial Senior Supervisor for Research Japhet Tantiangco.

“We may see optimism if investors hear more plans to solve the country’s lingering concerns including food security, inflation, and fiscal consolidation in the upcoming SONA,” he noted.

Investors are also seen to watch out for plans on how to sustain the economy’s recovery from the pandemic.

Aside from the SONA, Tantiangco said investors are expected to take cues from the Federal Reserve’s upcoming policy meeting.

“A 75 basis point rate hike by the Fed may have already been priced in. Thus, a policy tightening more aggressive than the aforementioned may cause downward pressure on the market,” he added.

Meanwhile, 2TradeAsia.com said “Volatile trading is expected next week, as the US Fed will convene anew--a 75bps rate hike is practically set in stone, although 100bps is not too far from imagination as inflation remains stubbornly high and is pushing the US to recession territory.”

It noted that firms such Meralco, Wilcon, and the Aboitiz group will also be reporting their first half performances and “overall results for the first half should print better year-on-year.”

“As market sentiment continues to walk on eggshells... Brace for lighter trading sessions building up ahead the Chinese Ghost month (July 29 to August 26),” 2TradeAsia.com said.

For stock picks, Abacus Securities Corporation noted that NAIA passenger traffic reached 8.29 million last quarter, 50 percent higher than in the first quarter and this should be great news for MacroAsia.

While the impact of high passenger volumes on the earnings of airlines may be diluted by higher fuel costs and foreign exchange losses, MacroAsia is seen to benefit from the meals it serves on international flights which have higher margins.

Abacus also likes Robinsons Retail Holdings Inc. because it has maintained its share buyback program which supports its share price and investors.

“Upcoming earnings are expected to be favorable, reinforcing our buy call on the stock,” it added.

Meanwhile, COL Financial has a buy rating on Metro Pacific Investments Corporation because “We believe that while it is still uncertain how the new concession agreement will impact the outlook and value of Maynilad, investor sentiment on MPI could improve going forward as the new concession agreement will ease uncertainties on Maynilad, as well as concerns on MPI’s other regulated core businesses.”

It noted that, “Based on MPI’s current market price of P3.70 per share, the company is trading at a 59 percent discount to its net asset value which implies that Maynilad and its toll road business are already worthless. MPI is also trading below its 45.5 percent stake in Meralco(equivalent to 141 percent of MPI’s current market capitalization).”