|Posted by EJ on October 25, 2010 at 3:00 AM||comments (0)|
Moderate growth signal kept coming from the US last few weeks suggest the growth is stable but not outstanding. By Nov end, the next round of quantitative easing may start. Consumption will remain soft in spite of holiday season.
G20 cud not agree to any firm point on currencies, hence left to the mkt forces to decide on this issue. We may expect further weaking of Dollar;subsequent uptrend in commodity prices and emerging mkt stocks. Emerging mkt like China, India faces bigger inflationary problem in next few quarters.
Huge IPOs those are hitting Asia will absorb the liquidity from secondary mkt. Expect action in selective counters. IPO refund will give sporadic push to mkts. Real estate, financial, auto segment looks good.
|Posted by EJ on September 23, 2010 at 11:01 PM||comments (0)|
Jobless claim in the US was marginally up showing the weakness in the labour market is still prevalent. Existing home sales data was better. However it does not imply any major change in housing sector. The continued tax credit will definitely help consumption but not housing. Going fwd housing is not going to contribute to the general economy significantly. Today's new home sales and durabale goods data will throw more light on this. Other data to watch out for is German IFO ( industrial activity ) to be realeased today.
FOMC remarks were good enough to make the bond traders happy with fixed income bonds appreciating globally including those in India. There is a catch though as domestic inflation is much higher and beyond comfort level of the policy makers. However nobody wants to switch off the growth engine so soon as global condition is not capable of providing any cushion. We expect a pause in the rate hike cycle in India, hence a bullish stock market running into 3Q. Watch out for massive flux of IPOs. It may drain out liquidity from secondary market.
|Posted by EJ on August 19, 2010 at 11:56 PM||comments (0)|
US macro data is not looking great as we suggested in this column sometime back. The momentum is really stalled. Now the worry is whether it will reverse?? At this point of time this seems unlikely. However the point to be noted, all the major economies are withdrawing stimulus!! including India. If US economy falters, then we may not expect anything substantial from the emerging mkts to set-off the effects. Jobs and manufacturing and all other leading indicators have started pointing to a slow growth period.
Domestic mkts are buoyed by good monsoon, soft industrial commodity prices and reasonable interest rate; will continue to out perform the most of asia including China. Stay invested till the festive season.
|Posted by EJ on August 16, 2010 at 12:46 AM||comments (0)|
Two important set of data over the weekend is going to give very marginal direction in the mkt. One is the lower than expected retail sales in the US and the second, less than estimated GDP growth in Japan. Both may appear as slightly disappointing, yet these are indicators of stability. We need to be apprehensive about the US data that may come out this quarter as these will show the true nature of recovery sans the stimulus. However there is general aversion of risk and currencies like USD and JPY were bought last week. Copper prices climbed up as the Goldman report suggests of firm emerging mkt demand against poor supplies.
Indian mkts were bullish last week, yet lil subdued from global cues. The results those came out during weekend like Unitech, suzlon etc were not at all immpressive. We expect a pause now before the momentum picks up again. Firm USD against INR is another key worry as the flow must be stopping or on hold. If the later is correct, then we can expect a good rally happening by begining of sept.
|Posted by EJ on August 13, 2010 at 10:00 AM||comments (0)|
US job data was mostly along anticipated lines, analysts may site some adjustments due to delayed lay-off, slowdown in emergency job schemes etc. yet the crux is - job growth is stable if not growing. This was probably worrying the fed as it falls short from their expectation. The Culprit, "Greek shadow" is back again hunting eurozone. Recent Greek economic data shows anything to cheer as EUR retraced its brave recovery in weeks. Although Asian markets are defying, it may be a lag effect that can show up later part of the month.
Domestic markets remain cheerful as the result season keeps us entertained. The monsoon effect is widely felt. The food price inflation is still sticky yet be assured it has nothing to do with rain-or-norain, it was started by a cratel of supply side players which has to bust to provide any kind of relief. Proof is the sugar price drop..yet there are lot more of them still holding out. Go short in these soft commodity players.