Personal finance insights: Market sentiments, investment strategies & economic trends
Dr K C Gupta, YBB Personal Finance
SENTIMENTS
AAII Bull-Bear Spread +3.7% (below average)
$NYA50R, NYSE %Above 50-dMA 29.06% (oversold)
$SPXA50R, SP500 %Above 50-dMA 27.00% (oversold)
Delta MSI 34.6% (negative)
ICI Fund Allocations (Cumulative)
OEFs & ETFs: Stocks 61.41%, Hybrids 4.27%, Bonds 17.40%, M-Mkt 16.92%
INTEREST RATES
CME FedWatch
Cycle peak 5.25-5.50%
Current 4.25-4.50%
FOMC 1/29/25+ hold
FOMC 3/19/25+ hold
Treasury
T-Bills 3-mo yield 4.31%, 1-yr 4.20%; T-Notes 2-yr 4.31%, 5-yr 4.45%, 10-yr 4.62%; T-Bonds 30-yr 4.82%; (all 4.xx%; near flat yield-curve; upslope beyond 1-yr)
TIPS/Real yields 5-yr 2.07%, 10-yr 2.28%, 30-yr 2.49%; (normal upslope)
FRNs Index 4.286%
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, 1/1/25
TIAA Traditional Annuity (Accumulation) Rates
Restricted RC 5.25%, RA 5.00%
Flexible RCP 4.50%, SRA 4.25%, IRA-101110+ 4.50%
TSP G Fund pending (previous 4.250%).
Due to publication lag, the data above are as of the Sunday preceding.
MARKETS
The US SP500 has stalled during the favorable seasonality period (11/1 – 4/30). It’s just below its 50-dMA; the 200-dMA is about 6% below. The rising dollar is surprising in view of the US budget deficit & total debt, & that’s creating problems for most other countries.
US federal offices & the stock market will be closed on January 9 for the state funeral of the 39th President Jimmy CARTER (100).
INDIAN stocks remain in pullback mode (less than 10% decline from recent highs) near 200-dMA; they remain expensive at fwd P/E of 23.8. A further weakness may provide a good entry point.
There were record 317 IPOs in India in 2024 raising Rs 1.8 trillion ($21 billion) far outpacing the prior record in 2021. The IPO money raised was 2.9% of the Indian market-cap (prior records were 3.7% in 2017, 3.4% in 2021).
Mega IPOs included Hyundai Motor (#2 automaker in India), Vodafone Idea (telecom), Swiggy (food delivery), NTPC Green (renewable energy), & Vishal Mega Mart (online retailer). SEBI has streamlined the IPO filing processes including for e-IPOs. Only 3% of Indian population owns stocks, so there is huge potential for growth of stocks. Consumer spending is only 33% of the GDP & that should continue to rise as the middle class grows.
In the auto news, Osamu Suzuki (94) passed away. He revived Suzuki in Japan, & Maruti in India as Maruti-Suzuki that is now #1 automaker in India.
IT/TECH
Reliance Industries Ltd (RIL) subsidiary Reliance Digital Health Ltd (RDHL) is buying 45% stake ($10 million) in the US Health Alliance Group Inc (HAGI; 12/2023- ). HAGI is a small company that operates at the intersection of healthcare & IT in the US, India & elsewhere. But Ambani doesn’t do anything small, so watch where this venture may go. It’s not to be confused with the healthcare insurer Health Alliance/Carle Health based in Illinois.
ECONOMY
Dr Manmohan Singh (92) passed away. An economist, professor, reluctant politician (Finance Minister, 1991-96) & accidental Prime Minister (2004-14; there also was a 2019 movie with the same name), he started transformational changes in India. A state funeral was held on Saturday, 12/28/24.
Oil consumption growth in India is high & it’s 25% of the total global growth in oil consumption. However, the picture is different for the total oil consumption.
Chinese companies are returning to India with local partnerships & joint-ventures. Online retailer Shein (HQ in Singapore) has partnered for distribution through Ambani’s Reliance Retail Ajio; Shein’s direct operations were banned in 2020. TV manufacturer Hisense is buying 26% stake in EPACK Durable. Vivo & Dixon Technologies have a joint-venture to produce electronic devices.
To curb speculation, the SEBI has extended halts (2021- ) in futures trading of key agricultural commodities until 01/31/2025. Affected will be soybean & its derivatives, crude palm oil, wheat, paddy rice, chickpeas, green gram & rapeseed. As previous halt extensions were for 12 months, this short extension may be a precursor to the start of futures trading in these commodities in 2025. Futures are volatile & can be used for hedging &/or speculation; they also have a role in price discovery in normal times.
Poor sugarcane harvest due to adverse weather (droughts or excessive rains) or disease will significantly reduce Indian sugar exports. India is #2 global sugar producer but also has high domestic sugar consumption; some sugarcane is used for industrial ethanol production.
RETIREMENT
Repeal of Social Security WEP & GPO offsets will increase monthly payments to about 3 million US retirees.
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