The United States Federal Reserve (Fed) announced it will indefinitely continue with its Quantitative Easing program, pressing on with its $85 billion monthly bond purchases as a way of extending stimulus to a still fragile US economy.
Federal Reserve defers QE3 tapering to 2014
Philippine stocks are most probably gearing for a rally today following the announcement of the U.S. Federal Reserve that it will not end its Quantitative Easing program.
Earlier today, U.S. Federal Reserve Chairman Ben Bernanke said that the Fed will continue with its bond-buying program because current market conditions “are still far from what all of us would like to see”.
U.S. Fed announces Quantitative Easing (QE3) tapering
The Federal Open Market Committee (FOMC) of the U.S. Federal Reserve announced yesterday, June 19, that if the U.S. economy continues to improve, it will start winding down its asset-buying program and may completely end it by mid-year of 2014.
The news sent stock markets in the United States down by more than 1 percent, with the Dow Jones industrial average (DJIA) closing 205.96 points lower, or 1.34%, at 15,112.27.
The Standard & Poor’s 500 Index (S&P 500), meanwhile, closed 1.39% lower at 1,628.92, while the Nasdaq Composite Index was down 1.12% at 3,443.20.
(S&P upgrade) Philippines gets 2nd investment grade rating
Just a month after the Philippines received its first-ever investment grade rating from Fitch Ratings, another credit rating agency gave the country its stamp of approval by bestowing upon the Philippines a BBB- rating, equivalent to a lower medium investment grade.
Standard & Poor’s (S&P), one of the top three credit rating agencies in the world, upgraded the Philippines’ long-term foreign currency- denominated debt from BB+ to BBB-, with a stable outlook. (See definitions of the credit ratings in the article “Moody’s, Fitch, and S&P and what their credit ratings mean“)
Unemployment Rates by country (2013)
Millions of college-level students are graduating or have graduated again at this time of the year. Millions of Filipinos, then, will be added to the labor workforce and, if available jobs are not enough to absorb them, would surely increase the country’s unemployment rate.
As of the latest quarter, the Philippine unemployment rate stands at 7.10%. This translates to more than 2.89 million Filipinos without work.
Investment Grade: Fitch upgrades Philippines’ credit rating
The Philippines is now investment grade.
The news that everyone in the financial markets has been waiting for is finally here. Fitch Ratings announced today that it is upgrading the Philippines’ long-term foreign currency bond rating from BB+ to BBB-, the first notch in investment grade ratings.
Cyprus Financial Crisis: A simple explanation
Up until a week ago, investors were in euphoria because stocks were reaching new all-time highs. On March 14, 2013, the Dow Jones closed at a record 14,539.14 — a level not seen since pre-subprime mortgage crisis of 2007. Philippine stocks, meanwhile, continued its upsurge, ending at its all-time best of 6,835.21 on March 7, 2013.
And then last week, the market reversed. After reaching a new all-time high, the Dow Jones slid and was unable to return to record levels. The Philippine Stock Exchange index suffered a decline and, as of yesterday, registered its eighth consecutive day of losses.
What happened, you ask? Blame it on the Cyprus financial crisis.
[Moody’s] Credit Rating by Country, as of February 2013
As explained in the article Credit Ratings by S&P, Moody’s and Fitch Ratings, a “credit rating” is a measure of the ability of an entity, whether a company or a sovereign state, to repay its debt. It shows the quality of loan instruments issued by the borrowing entity and whether these debt instruments can be repaid on time.