By: Dr K C Gupta, YBB Personal Finance

Mini Feature DRONES & GEOPOLITICAL INSTABILITIES

CONTRARIAN INDICATORS

AAII Bull-Bear Spread -11.1% (below average)
CNN Fear & Greed Index 42 (fear-low)
NYSE %Above 50-dMA 55.39% (positive)
SP500 %Above 50-dMA 62.40% (positive)

ICI Fund Allocations (Cumulative), 6/30/26
OEFs & ETFs: Stocks 63.07%, Hybrids 3.86%, Bonds 16.93%, M-Mkt 16.15

INTEREST RATES

CME FedWatch
Cycle peak 5.25-5.50%
Current 3.50-3.75%
FOMC 9/16/26+ hike
FOMC 10/28/26+ hold

Treasury

T-Bills 3-mo yield 3.83%, 1-yr 4.08%; T-Notes 2-yr 4.28%, 5-yr 4.45%, 10-yr 4.75%; T-Bonds 30-yr 5.27% (normal yield-curve);
TIPS/Real yields 5-yr 2.19%, 10-yr 2.47%, 30-yr 3.03%
FRNs Index 3.852%

Bank Rates www.depositaccounts.com/



Stable-Value (SV) Rates, 8/1/26
TIAA Traditional Annuity (Accumulation) Rates
Restricted RC 5.25%, RA 5.00%
Flexible RCP 4.50%, SRA 4.25%, IRA-101110+ 4.15%
TIAA MYGA (stale) 4.55% (3-yr), 4.70% (5-yr), 4.75% (7-yr)
TSP G Fund pending (previous 4.500%)

India Fear & Greed MMI 73.01 (extreme greed; strange)
Weekly ETFs: INDA +3.71%, INDY +3.23%, EPI +3.12%, INDH +1.64% | SPY +1.10%

The data above are as of Sunday preceding the publication date.

CONSUMERS

Genpact-India (subsidiary of US Genpact/G) & Swiss Nestlé are partnering for a GCC in Hyderabad. The GCC will focus on process technologies using AI & other advanced techniques that may be deployed by Nestle in India & globally. Genpact was founded in India as GECIS (by US GE) in 1997, but after several M&A, it changed its name to Genpact in 01/2005, has been listed on NYSE as G since 08/2007, & has headquarters in US.

IT/TECH

US Carlyle Group/CG bought a controlling stake (60% that may be reduced to 51% in phases) in Indian defense-tech Micropack that produces military/space-grade PCBs (printed circuit boards). There are concerns in social-media about foreign companies having controlling interests in critical technologies in India. It seems to defeat the notion of self-reliance. Foreign controls or licenses may be subject to interferences through foreign governments’ policies including trade policies & sanctions. There are already some messy situations in India involving US & EU sanctions on Indian companies using products under foreign licenses.

TRANSPORTATION

India launched a hydrogen-powered train. The 1.2 MW (1,609 hp) hydrogen fuel-cell propulsion system for this green-train has only water vapor & heat as byproducts. The 10-unit train with 2 “engines” (2.4 MW or 3,218 hp) & 8 coaches will be used on 55-mile route between Jind & Sonipat in Haryana. This commercial pilot deployment of indigenously produced technology is India’s demo (a first) vs lab demos elsewhere. Only China, Germany, Japan & US have such experimental trains.
Indian railway system is now 99% electrified, so, the Hormuz disruptions for diesel supplies didn’t impact this sector at all. Hydrogen trains will be useful where electrification isn’t practical.

SPECIAL TOPIC – DRONES & GEOPOLITICAL INSTABILITIES

Drones (air, sea, land) have changed the nature of warfare. Air drones are difficult to detect by radars & special doppler radars must be used to detect small drones. It’s very expensive to shoot cheap drones with expensive missiles & antimissile systems. Drone swarms can overwhelm or drain expensive defensive systems. Evolving anti-drone technologies include radar/GPS jamming & high-energy weapons that can damage drones’ optical-fiber-based systems & plastic bodies.

Top producers of drones now are China, Iran & Ukraine, with US to join this group soon with an accelerated push.

Drones have shown the limitations of conventional military systems & they have been effective in uneven wars. There have also been limited cross-border skirmishes with drones (& missiles) without triggering full-fledged ground wars.

Ukraine has used drones effectively in Russia-Ukraine war 02/2022- . This was a war that Russia thought it could win in a few days. Ukraine also demonstrated special operations forces (SOFs) capabilities where the drone parts were shipped secretly, drones assembled deep within Russia, & then deployed en masse (drone swarms). This overcame limited range constraints of drones. Some drones use satellite navigation. Russia also relied on Iranian or related drones.

India-Pakistan, May 7-10, 2025. They both deployed drones & missiles. India & Pakistan have nuclear capabilities. They both have significant offensive capabilities but limited defensive capabilities.

In US-Israel-Iran war, February & June, 2026, while US & Israel deployed planes, missiles, ships & aircraft carriers, & drones Iran relied heavily on drones & missiles. Despite a huge mismatch in military capabilities, Iran could hang on with home-grown drones & missiles.

The notion of deterrence has been weakened by these events. There is higher geopolitical instability due to the use of drones. There are geopolitical hot spots in Korea & China regions. Criminals can also use drones for illegal & disruptive purposes. An effective anti-drone system has yet to be developed.

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