GLOBAL technology firm Nasdaq does not see a decline in the US stock market, which could affect Philippine shares, despite the escalating conflict in the Middle East.
“As much as the tragedy in the Middle East, and it’s hard to watch every day at the moment, that is not impacting the [US] markets to a large degree unless there’s going to be even more escalation outside of where it is today,” Nasdaq President of Capital Access Platforms Nelson Griggs said during a media briefing in Taguig City last week.
Hamas militants backed by a barrage of rockets stormed from the blockaded Gaza Strip into nearby Israeli towns, killing dozens in a surprise attack on Oct. 7, news reports said.
Israeli Prime Minister Benjamin Netanyahu reportedly announced on Oct. 28 that Israel had launched the second stage of the Gaza war as it pressed ground operations versus Hamas militants.
The Nasdaq Composite rose 47.40 points or 0.38% to 12,643.01 on Oct. 27. However, other US markets declined such as the Dow Jones Industrial Average, which fell 366.71 points or 1.12% to 32,417.59, and the S&P 500 Index, which dropped 19.86 points or 0.48% to 4,117.37.
Locally, the benchmark Philippine Stock Exchange index dropped 56.50 points or 0.94% to 5,961.99 while the broader all shares index fell 19.55 points or 0.6% to 3,246.47 as of Oct. 27.
According to Mr. Griggs, the interest rate environment has been the main driver of the US stock markets.
The US Federal Reserve is scheduled to make another interest rate decision on Nov. 1. The US policy rate was kept at the 5.25% to 5.5% range during the last meeting in September.
“What’s really driving the US markets, particularly, is the interest rate environment,” Mr. Griggs said. “That just drives expenses up for everything. It impacts home loans, auto loans, and business loans. I think that has gone on a bit longer than we had anticipated.”
“At the same time, we also thought we’d be in a recession in the US by now. We’re not. So those two competing factors are really what we’re watching,” he added.
Meanwhile, Mr. Griggs said that Nasdaq is optimistic about the US stock market because of increased market activity.
“We’re optimistic when we get to 2024, probably more like the back half. We started seeing some of that capital markets activity pick up,” Mr. Griggs said.
“Every market is different. But I think a lot of markets around the world will take cues from where we are going in the US,” he added.
Nasdaq is a global technology firm that caters to corporate clients, investment managers, banks, brokers, and exchange operators. The company’s products include data, analytics, software, exchange capabilities, and client-centric services.
The company said it was aiming to hike its workforce in the Philippines to 400 employees by the end of next year. It currently has more than 300 employees in the country. — Revin Mikhael D. Ochave