Personal finance insights: Market sentiments, investment strategies & economic trends
By: Dr K C Gupta, YBB Personal Finance
SENTIMENTS
AAII Bull-Bear Spread +20.1% (above average)
$NYA50R, NYSE %Above 50-dMA 73.98% (overbought)
$SPXA50R, SP500 %Above 50-dMA 77.20% (overbought)
Delta MSI 79.5% (overbought)
ICI Fund Allocations (Cumulative)
OEFs & ETFs: Stocks 61.04%, Hybrids 4.45%, Bonds 17.89%, M-Mkt 16.63%
INTEREST RATES
CME FedWatch
Cycle peak 5.25-5.50%
Current 4.75-5.00
FOMC 11/7/24+ cut (the meeting after the US elections)
FOMC 12/18/24+ cut
Treasury
T-Bills 3-mo yield 4.73%, 1-yr 4.19%; T-Notes 2-yr 3.95%, 5-yr 3.88%, 10-yr 4.08%; T-Bonds 30-yr 4.38%
TIPS/Real yields 5-yr 1.65%, 10-yr 1.77%, 30-yr 2.09%
FRNs Index 4.567%
US Savings I-Bonds, Rate from 5/1/24 – 10/31/24 is 4.28%; the fixed rate is 1.30%, the semiannual inflation is 1.48%.
For current banking rates, see www.depositaccounts.com/
Stable-Value (SV) Rates, 10/1/24
TIAA Traditional Annuity (Accumulation) Rates
Restricted RC 5.00%, RA 4.75%
Flexible RCP 4.25%, SRA 4.00%, IRA-101110+ 4.25%
TSP G Fund 3.875% (previous 4.000%).
Due to publication lag, the data above are as of the Sunday preceding.
MARKETS
The US bull run from 12 Oct 2022 low has been very strong (SP500 +63.84%, Nasdaq Comp +77.42%) & it hasn’t been interrupted by Sept or Oct (so far). Almost everything is rallying – the Magnificent 7, big techs, large/mid/small-caps, cyclicals, gold (see 10/18/24 issue), dollar. The US election jitters haven’t hit the market yet. But SP500 fwd P/E of 22 is high. Do rebalance to your appropriate allocation & raise some cash for any anticipated needs over 1-2 years.
Emerging markets (EMs) have benefited from the US Fed rate cut & China easing (baby steps so far). Many EMs are benefiting from US-China tensions – INDIA, Vietnam, Thailand, Indonesia, Mexico, Chile, South Africa, BRICS. India is a fast-growing EM, but it’s expensive at fwd P/E 24; its IPO market is red hot; a pullback/ correction may provide a good entry point.
Semis are strong in Taiwan & S Korea. Despite the tensions in the Middle East, the growing EMs there are Saudi Arabia & UAE (its city Dubai is better known). Notable EM OEFs are GQGPX (Rajiv Jain), PRIJX, WAESX (Ajay Krishnan); EM ETFs IMEG, DEM, FRDM. The EMs aren’t homogeneous & broad market-cap based indexes (VEMAX/VWO) aren’t the way to go as those will have high exposure to the large-caps in China & India.
INDIAN BONDS will be included in FTSE Russell Emerging Markets (EM) Government Bond Index (EMGBI) starting 09/2025 at 9.35% weight; previously, they were included in JPMorgan’s Government Bond Index-EM index in 06/2024 & will be included in Bloomberg’s EM Local Currency index in 01/2025.
INDIAN GOVERNMENT will now allocate the SATELLITE SPECTRUM. The local tycoons (AMBANI, MITTAL, etc) had asked for an auction just like for the other telecom spectrum. But the Government sided with MUSK who said to allocate this ITU-reserved scarce resource as per his prior talks with the Government.
OUTSOURCER Cognizant/CTSH is getting into aerospace, defense, onshoring, AI, etc – not traditional areas for outsourcing. It can help with both offshoring, onshoring & anywhere-shoring. The NJ based company has 75% of employees in India; CEO Ravi KUMAR.
TAXES
TAX LOSS HARVESTING (TLH) is now in 2 parts – institutional TLH by Oct 31 (Thursday) when funds can close their books for the year to produce timely estimates for yearend CG distributions, & retail TLH by Dec 31 (Tuesday). So, the losing stocks have difficult time in Oct & Dec, but they tend to bounce in Jan (the January Effect).
As for your own TLH, there are 2 approaches: The older doubling-up by 11/29/24 (Friday; early market close) & selling the older lot by 12/31/24 (Tuesday); & with zero commissions now, selling a losing stock & immediately buying something similar but not identical (this can be done even on 12/31/24 because it’s the trade date that matters).
For more information, see ybbpersonalfinance.proboards.com/
