Personal finance insights: Market sentiments, investment strategies & economic trends

By: Dr K C Gupta

SENTIMENTS

AAII Bull-Bear Spread -2.7% (below average)
$NYA50R, NYSE %Above 50-dMA 27.40% (oversold)
$SPXA50R, SP500 %Above 50-dMA 17.20% (oversold)
Delta MSI 33.2% (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 4.36%, 1-yr 4.25%; T-Notes 2-yr 4.40%, 5-yr 4.59%, 10-yr 4.77%; T-Bonds
30-yr 4.96%;
TIPS/Real yields 5-yr 2.08%, 10-yr 2.34%, 30-yr 2.60%
FRNs Index 4.250%
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 4.625% (previous 4.250%).
Due to publication lag, the data above are as of the Sunday preceding.

MARKETS

The US stocks rallied to November 5 elections & have stalled post-election. There are many uncertainties related to the Fed & Trumponomics 2.0 (taxes, budget deficits, public debt, tariffs, inflation, immigration, & deglobalization). US bond yields have risen.
Barron’s 2025 Roundtable this week includes Sonal DESAI (Franklin Templeton) & Rajiv JAIN (GQG Partners) among 11 renowned asset managers & strategists. It’s in 3 parts with 2 nd & 3 rd parts to follow.

The GDP & earnings slowdown have caused weakness in the INDIAN stock market. It’s below 50-dMA & 200-dMA & is in a correction (10-20% down from recent high). A death-cross may be ahead. But several analysts remain optimistic & suggest that Indian stocks may bottom soon.

Rupee sank, $1 = Rs86.17, & maybe headed to 90. A strong dollar cuts into the foreign returns of the US investors. Dollar is approaching 9/28/22 high of 114.75 (only 4.8% away).
Rupee-hedged India ETF INDH (5/7/24-) from WisdomTree had a large buyer on 5/24/24 who exited on 11/14/24 (MFOP data). The current AUM for this unique India ETF is now low at $11.7 million; the US ETFs need $50-100 million AUM to be viable. As its liquidity is low, interested buyers must use limit-orders.

IT/TECH

Microsoft/MSFT will invest $3 billion over 2 years for AI & cloud developments in India. It will collaborate with Physics Wallah on AI reasoning & deductions, SaaSBoomi for some B2B startups (Saas = Software as a Service), several other companies (Apollo Hospitals, Bajaj Finserv, Mahindra, RailTel, upGrad), & the government ministry MeitY to develop AI training programs & AI centers of excellence.

ECONOMY

BRAHMAPUTRA river flows through Tibet (as Yarlung Tsangpo), India (as Brahmaputra) & Bangladesh (as Jamuna; not to be confused with Yamuna). CHINA has proposed the world’s largest hydroelectric dam (50,000 MW capacity) in the Tibet Autonomous Region of China where the river’s elevation falls rapidly (2,000 m over just 50 km, or 6,560 ft over just 31 miles) & just ahead of a sharp U-turn (at Namcha Barwa).

Besides ecological & geopolitical impacts, it will affect the waterflows downstream. This is also a seismically active hilly area (recent 7.1 earthquake on 1/7/25 was in Tingri, Southern Tibet). India has indicated concerns.

Selected hydroelectrical power capacities: Three Gorges (China) 22,500 MW (largest now), Itiapu (Brazil-Paraguay) 14,000 MW, Grand Coulee (US) 6,800 MW, Tarbela (Pakistan) 4,888 MW, Niagara (US) 2,525 MW, Tehri (India) 2,400 MW (when fully operational), Aswan (Egypt) 2,100 MW, Hoover (US) 2,080 MW, Koyna (India) 1,960 MW.

JAPANESE Nippon Steel’s (with US operations since 1980s) dream for capacity expansion through US Steel/X has now ended – the US-CFIUS expressed national security concerns about the deal but made no recommendation(s), President Biden rejected it, President-Elect Trump had also indicated opposition. If it was another steel company not named “US Steel”, the deal may have been approved.

Nippon Steel & US Steel have filed desperate lawsuits against the US Administration but their outcomes are uncertain.

Nippon or other Japanese steel companies will look elsewhere in the quest of Japan becoming #2 – now, #1-China, #2-India, #3-Japan, #4-US. India should be open to Japanese collaborations or joint-ventures. Despite being #2 producer, India imports lot of steel from China & elsewhere to meet its high domestic demand.

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