THE MARKET will take its cue from US economic data this week, as investors scout for catalysts to push stocks to higher levels.

The Philippine Stock Exchange index (PSEi) closed at 7,885.90 on Friday, down 0.64% or 50.95 points from Thursday’s close.

The bellwether’s finish was also lower by 3.43 points or 0.04% week on week from its 7,889.33 close last July 7, with sectors closing mostly lower led by services and financials, which declined by 0.42% and 0.24%, respectively.

Value turnover reached P7.5 billion, up 26% week on week. Losers outnumbered winners at 103 to 97, while net foreign outflows totalled P173 million.

The market moved mostly sideways last week due to Federal Reserve Chair Janet L. Yellen’s testimony to the US Congress last Wednesday, where she said the US economy is healthy enough for the Fed to raise rates and begin winding down its massive bond portfolio, though low inflation and a low neutral rate may leave the central bank with diminished leeway.

The Fed “continues to expect that the evolution of the economy will warrant gradual increases in the federal funds rate over time,” Ms. Yellen said in her prepared testimony.

At home, players turned to second quarter earnings as well as economic growth projections for the rest of the year.

“[This] week, the markets will be feeding off the latest economic data that will be announced in the US on Friday: core CPI (consumer price index), retail sales, manufacturing production and industrial production,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said ahead of the data release.

US consumer prices were unchanged in June and retail sales fell for a second straight month, pointing to tame inflation and soft domestic demand that diminished prospects of a third interest rate increase from the Fed this year.

Still, the economy likely regained speed in the second quarter after a sluggish performance at the start of the year. Other data on Friday showed industrial production picked up in June, driven by a surge in oil and gas drilling.

Mr. Limlingan said investors may also start positioning ahead of second quarter earnings.

Support remains at 7,800, while resistance is pegged at the 7,950 to 8,000 level, he said. said markets may also look to the policy meetings of the European Central Bank and the Bank of Japan this week “as concerns have been brewing how various central bankers will decide in tightening policies without creating a blip in financial markets.”

The market is waiting for the PSEi to breach the 8,000 level which it has neared in several trading days last week, it said.

“Any hint on the commencement of infra[structure] spending & efforts to support corporate earnings growth will reinforce investors’ valuation perception, especially those in the hunt for better returns,” the online brokerage added, placing support at 7,800 and resistance at 7,900 to 7,950. — JCL with Reuters