By: Dr K C Gupta

CONTRARIAN INDICATORS

AAII Bull-Bear Spread +15.0% (above average)
CNN Fear & Greed Index 45 (neutral-low)
NYSE %Above 50-dMA 57.85% (positive)
SP500 %Above 50-dMA 59.20% (positive)

ICI Fund Allocations (Cumulative), 11/30/25
OEFs & ETFs: Stocks 61.55%, Hybrids 4.05%, Bonds 17.36%, M-Mkt 17.04%

INTEREST RATES

CME FedWatch
Cycle peak 5.25-5.50%
Current 3.50-3.75%
FOMC 1/28/26+ hold
FOMC 3/18/26+ hold

Treasury

T-Bills 3-mo yield 3.65%, 1-yr 3.47%; T-Notes 2-yr 3.47%, 5-yr 3.74%, 10-yr 4.19%; T-Bonds 30-yr 4.86%;
TIPS/Real yields 5-yr 1.46%, 10-yr 1.94%, 30-yr 2.63%
FRNs Index 3.602%

Bank Rates 
www.depositaccounts.com/


Stable-Value (SV) Rates, 1/1/26
TIAA Traditional Annuity (Accumulation) Rates
Restricted RC 5.00%, RA 4.75%
Flexible RCP 4.25%, SRA 4.00%, IRA-101110+ 3.50%
TSP G Fund 4.250% (previous 4.125%)

India Fear & Greed MMI 65.11 (greed-high)
Weekly ETFs: INDA +1.34%, INDY +0.73%, EPI +1.96%, INDH +1.11%, SPY -1.03%

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

IT/TECH

Indian IT firm Coforge is acquiring US AI & analytics firm Encora (from Advent & Warburg Piscus who will own 20% of Coforge) in a stock transaction.

ECONOMY

Bilateral Free Trade Agreements (FTAs) have been signed so far with UK, Oman & New Zealand (57% of items duty-free). In advance stages are negotiations with US, EU, etc. Negotiations have been just started with Mexico after it raised tariffs on countries without trade agreements.

India’s global M&A are rising. It’s not just foreign investors rushing into India (inbound M&A), but Indian investors are also venturing out (outbound M&A). Considering total M&A (including domestic), outbound M&A are 25.4% of the total. Rally in Indian stocks has contributed to these tactical & strategic opportunities.

US ENERGY STORAGE company Fluence/FLNC is exploring manufacturing in India for exports. Fluence is a joint-venture (JV) by German Siemens/SIEGY & US AES. Fluence-India also has a JV with ReNew Energy/RNW (India-based, Nasdaq-listed).

US startup DirectH2 & Indian agricultural company STSPL (sugar, ethanol, biogas, power) are collaborating on solar-to-green-hydrogen production technology.

Japanese MUFG Bank (subsidiary of MUFG Financial) is buying 20% passive stake in Indian nonbank financial (NBFC) Shriram Finance (subsidiary of Shriram Group). Note that foreign firms can now have 100% stake in Indian insurance companies, nonbank financials & pension firms; 74% in Indian private banks, 20% (proposed 49%) in Indian public sector banks, 15% in Indian exchanges.

SPECIAL TOPIC – INDIAN DEFENSE INDUSTRY

Recent geopolitical events will accelerate changes in Indian defense policies & the industry. Currently, India produces 70-75% of its defense needs & imports 25-30% in advanced defense equipment from various countries (France, Israel, Russia, UK, US, etc). A key requirement for major defense imports is the start of some local production in India (i.e. indigenization or technology transfer). The defense exports are small now; there are also many defense-related import & export restrictions.

Almost 60% of Indian defense companies are government-owned/ controlled, 40% are private. But private companies have restrictions in the areas that they can operate or grow in. In the future, there may be more public-private joint-ventures (JVs).

India will have to diversify its defense equipment purchases. Lot of critical defense equipment have single sources now. In some cases, this is the limitation of the current global defense market that’s governed by various treaties, but India remains nonaligned, & the military systems & platforms cannot be changed drastically or frequently. It takes some time to put new defense equipment & systems into military service. Issues of incompatibility may arise from too many different types of systems in operation.

In the future, the private defense industry in India will have to grow. In order to remain viable & globally competitive, they will have to develop export markets even when the Indian government may be their biggest customer. Defense R&D will have to increase.

The nature of warfare is also changing.

Short/ intermediate-range missiles & drones have been deployed in some recent skirmishes without triggering full-fledged wars. Special operations forces (SOFs) may be used to secretly ship drone components in target countries, assemble them there, & then launch them en masse locally & deep into the target countries. Drones are difficult to detect by radars that are optimized for large bodies such as aircrafts & missiles. Special doppler radars must be used to reliably detect small drones. Drones are cheap, so using expensive antiaircraft or antimissile systems isn’t practical for neutralizing swarms of drones. A cost-effective way to neutralize drones has yet to be developed.

For more information, see https://ybbpersonalfinance.proboards.com/