This week, stock investors will be mainly looking at the policy meetings of the US and Philippine central banks for catalysts even as hopes for a Santa Claus rally seem to have waned.

“The local bourse is on a 2-week losing streak as investors continue to take profits. In the process, the market has fallen below its 10-day exponential moving average which was considered as an immediate dynamic support,” said Philstocks Financial Research Manager Japhet Tantiangco.

He noted that, “the local market remains at bargain levels with a price-to-earnings ratio of 13.46 times, below the 2018 to 2022 average of 19.08 times. However, strong buying may only happen if investors see catalysts that would brighten our economic outlook.”

“(This) week, investors are expected to focus on the policy meetings of the Federal Reserve and the Bangko Sentral ng Pilipinas as they look for clues on the outlook for interest rates," he said. 

“Hints of easing may spur optimism in the market while hints of further tightening is expected to weigh on sentiment,” said Tantiangco. 

He added that, “investors may also look towards our upcoming foreign trade, foreign investment, and OFW cash remittances data for clues on our local economy.”

Meanwhile, 2Tradeasia.com said “the US Fed will have its last meeting for the year next week on the 12th and 13th, with expectations of a no-change pretty much set in stone.”

“However, sentiment has dramatically become more optimistic since last week-yields and futures are showing nearly 50 percent chance of a BSP rate cut in as early as May 2024, and institutions in developed economies are forecasting a blue-sky scenario of up to 6 rate cuts for next year,” it added. 

But the brokerage said “we caution that these are not baseline expectations and therefore likely to come down as first quarter numbers materialize, but these positive projections signal that risk investors are likely heading to a place of more power, especially relative to where forecasts were last year.”

2Tradeasia.com said the BSP is likely to echo the Fed in a status quo in rates as Philippine inflation has further eased to 4.1 percent in November and prior rate hikes have seemingly impacted foreign exchange and money supply as intended. 

“All eyes are on the timing of the local easing cycle, especially as unlike the Fed, the BSP has kept its inflation expectations less optimistic with a potential continuation up to 2024,” it noted.

For stock picks, Abacus Securities Corporation said retailer SSI Group as the most appealing among its list of cheapest stocks because of its strong earnings forecasts for 2023 and 2024. 

It also noted that SSI has been the best performing company in terms of earnings over the past four years.

The brokerage said GT Capital is also cheap and worth buying because the car industry’s sales are about to mark a new all-time high and this will benefit Toyota Motors.

It said that its acquisition of an additional stake in Metro Pacific at a discount to net asset value will provide a long term boost.