By: Dr K C Gupta, YBB Personal Finance

CONTRARIAN INDICATORS

AAII Bull-Bear Spread +12.0% (above average)
CNN Fear & Greed Index 37 (fear)
NYSE %Above 50-dMA 60.04% (positive)
SP500 %Above 50-dMA 64.60% (positive)

ICI Fund Allocations (Cumulative), 5/31/26
OEFs & ETFs: Stocks 63.26%, Hybrids 3.89%, Bonds 16.80%, M-Mkt 16.05%

INTEREST RATES

CME FedWatch
Cycle peak 5.25-5.50%
Current 3.50-3.75%
FOMC 7/29/26+ hold
FOMC 9/16/26+ hike

Treasury

T-Bills 3-mo yield 3.85%, 1-yr 4.01%; T-Notes 2-yr 4.18%, 5-yr 4.28%, 10-yr 4.55%; T-Bonds 30-yr 5.06% (normal yield-curve);
TIPS/Real yields 5-yr 2.01%, 10-yr 2.31%, 30-yr 2.87%
FRNs Index 3.796%

Bank Rates www.depositaccounts.com/

Stable-Value (SV) Rates, 7/1/26
TIAA Traditional Annuity (Accumulation) Rates
Restricted RC 5.25%, RA 5.00%
Flexible RCP 4.50%, SRA 4.25%, IRA-101110+ 4.10%
TIAA MYGA 4.55% (3-yr), 4.70% (5-yr), 4.75% (7-yr)
TSP G Fund 4.500% (previous 4.500%)

India Fear & Greed MMI 49.25 (fear, barely)
Weekly ETFs: INDA -0.79%, INDY -0.16%, EPI -0.70%, INDH +0.42% | SPY -1.54%

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

FINANCIALS

UK insurer Aviva will become the 1st foreign company with 100% ownership of its life insurance unit in India after buying 26% stake from Dabur. New rules now allow up to 100% foreign ownership in insurance. 

HEALTHCARE

Sun Pharma is acquiring Innovcare Lifesciences that was backed by Peak XV Partners & IM Financial Private Equity. Innovcare distributes nutraceuticals (food-derived nutritional-pharmaceuticals or nutritional supplements) & also uses contract manufacturers to make its own brands. Peak XV evolved from Sequoia Capital – India (parent US Sequoia Capital).

IT/TECH

Canada Pension Plan (CPP) will invest in CitrlS Datacenters for 8.2% stake. A similar investment will be in a joint venture for building several additional datacenters. The demand for AI datacenters in India is growing rapidly from hyperscalers, GCCs & companies. Government has incentives for AI infrastructure development.

Datacenters are approved quickly by Indian government (central &/or state). All global AI/tech companies have operations in India, several in collaboration with local multinationals. They are being sold to the public as jobs generators, but beyond their initial construction phases, they won’t require many workers to operate. Public concerns also also growing due to their large land, water & electricity usage. It rains only for 2-3 months during the monsoon season (& there may be floods then), but India is dry rest of the year.

TRANSPORTATION

Swiss TIL/MSC is acquiring 49% stake in Adani Ports’ (APSEZ) Vizhinjam Port in Kerala. It’s a deep-water port on the Southwest coast of India that’s used for East-West shipping corridor linking Europe, Middle East & Asia through the Suez Canal & the Strait of Malacca. APSEZ & MSC has 2 other partnerships for ports at Mundra (Gujarat) & Ennore (Tamil Nadu). TIL = Terminal International Limited, 70% owned by MSC; MSC = Mediterranean Shipping Company (Swiss).

SPECIAL TOPIC – INFLATION

Everyone talks about inflation, but measuring it isn’t simple.

There is the broad consumer price index (CPI) that has headline & core (ex volatile food & energy) values. Urban CPI-U covers 93% of the US population; US Savings I-Bonds use CPI-U for recent 6 months to set variable rates on May 1 & Nov 1. Chained C-CPI-U accounts for typical consumer substitutions of expensive items with cheaper alternatives. Wage earners/ clerical workers CPI-W covers 29% of US population & is used by Social Security to compute annual COLA (Q3 vs prior year Q3).

There have been many changes in methodology that have the effect of suppressing the CPI – treatment of housing via owners’ equivalent rents (OERs), estimating healthcare costs from industry profits (not the premiums that consumers pay), consumer substitutions of more expensive items with cheaper ones (chain concept), etc.

Personal consumption expenditures index (PCE) is based on consumer spending on goods & services & it has nominal & core (ex food & energy) values. The PCE has lagged CPI for years.

Producer price indexes (PPI) are reported for manufacturing & services & are used by businesses as wholesale price indicators & they lead the CPI.

There is new attention on trimmed inflation indexes. Examples are Cleveland Fed’s 16% trimmed CPI (top & bottom 8% removed; symmetric) & Dallas Fed’s P24-69 PCE (P is percentile; bottom 23% & top 30% removed; asymmetric/ skewed).

Inflation-expectations are the differences between the yields of Treasuries & TIPS.

FRED at St Louis Fed provides lot of related data.

Fed targets +2% inflation & it’s favorite has been core PCE for years. The brief experiment with “average” +2% inflation didn’t turn out well. The new Fed Chair WARSH favors a trimmed inflation index – it’s lower than core PCE & CPI.

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