TOP 25 takeaways about future of Economy and Markets
- Double whammy of higher rates & b/s tightening
- Will be astonished if S&P-50 doesn’t fall by atleast 30% from peak
- After a 30% fall S&P-500, market will become very receptive to any hints about Fed changing stance
- A > than 30% fall would need markets to stay down & then big retail outflows
- Key question is if Fed’s changes language later this yr
- Huge political pressure from Washington on Fed
- All opinion polls in US show inflation No.1 issue for Americans
- For 1st time in > 40 yrs, we have pressure from political establishment on Fed
- U.S. consumer confidence has fallen dramatically, could be mix of inflation & stocks falling
- Cash buffers with U.S. consumers built up during pandemic running thin now, could be losses in stocks or crypto
- U.S. CPI will keep inflation story bubbling
- May CPI will make the market assume that the next hike will be 50 bps
- Problem is that the Fed is so far behind the curve, that they need to impose real rates now & they are nowhere close
- FII selling in India @ historic highs
- If people start losing money on 1 yr, see risk to retail inflows
- India a great story with 10 yr view
- Property mkt up, evidence of capex pick-up
- A sideways year, would be a good outcome for India
- RBI is behind the curve, but nowhere as far behind the curve as the Fed
- Base case is India corrects further,
supports (charts) at 14,000-14,500 - Don’t necessarily have to go there if retail inflows hold up, mkt trades sideways & valn adjust lower
- India is expensive, but U.S. valuations way more expensive (relative to sales)
- India a domestic demand driven story
- Risk is if monetary tightening delays capex pick-up
- History suggests that Indian market is heavily influenced by Wall St
For Information Only
Team- Intellex Strategic Consulting Pvt Ltd
Yuvamorcha.com, BuySellMergers.com, Venturestreets.com
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