Stocks to wait for more macro-economic data

The local stock market is seen to be weighed down again by concerns over inflation although investors are also expected to take cues from several macro-economic data both from the US and the domestic front. “For now, I expect the local market to move sideways with a downward bias next week as inflation concerns may take center stage again,” said Philstocks Financial Research Manager Japhet Tantiangco. He noted that, “Our March headline inflation did show a slowdown in the increase of the general price level. However core inflation rose from February to March implying that demand side pressures to prices remain strong.” “Adding to this is OPEC+'s surprise cut of its oil output which in turn poses upside risks to oil prices and consequently to our inflation as well,” Tantiangco added. He said investors may also take cues from upcoming economic data including the Philippine labor force survey, foreign trade data, and foreign direct investments data. “Investors may also consider the US' March official labor data with unemployment rate declining to 3.5 percent. While this shows that the US economy remains strong, it may also spark concerns that the Federal Reserve may still continue with their monetary tightening,” Tantiangco said. For its part, online brokerage 2TradeAsia.com said funds and other investors may stay on the sidelines until May as they wait for the first quarter gross domestic product figure. They may also look out for the results of the Federal Reserve and Bangko Sentral meetings which will also be in May. Earnings results for the first quarter of 2023 will be right around this time as well. “The relative monotone in April plus crucial macro movements in May will pressure prudent funds to withhold deployments or keep more dry powder until the broader picture becomes more conducive for bolder plays,” it added. For stock picks, COL Financial continues to recommend Puregold Price Club “as it remains well-positioned to capitalize on improving mobility trends despite near term inflationary headwinds.” “We also like PGOLD for its differentiated focus of middle to low-income class consumers through Puregold while it competes in the premium segment through S&R. Valuations also remain attractive,” it added. COL also has a BUY rating on Cebu Air because “We think that the reopening of international borders of neighboring countries should boost international flights and average fares.” "Meanwhile, elevated jet fuel costs and a weak peso are expected to drag margins. Nevertheless, we think these have been priced in by the current share price,” it noted. Abacus Securities Corporation said “We are taking a more constructive view of the company's outlook for this year. This is especially since jet fuel prices continued to fall last quarter and a stronger peso should help.” “With these in mind, we now project CEB will generate positive operating results every quarter this year and there's a good chance core profit before tax will also be in the black throughout the year. We therefore think the stock will break to the upside of its 2-year range at some point later this year,” the brokerage said. Meanwhile, Abacus said it remains confident that 2023 can be a record year for MacroAsia because “Domestic travel is already above pre-pandemic levels and MAC expects a big jump in the number of international flights serviced this year.” It added that, “the outlook for MAC has improved given the drop in jet fuel prices (airlines can pay more for catering and maintenance) and because PAL is fully back in the black.”