By: Dr K C Gupta

SENTIMENTS

AAII Bull-Bear Spread -38.3% (very low). (Thursday-Wednesday)
$NYA50R, NYSE %Above 50-dMA 49.26% (negative, but almost positive)
$SPXA50R, SP500 %Above 50-dMA 56.40% (positive)
Delta MSI 33.0% (negative)
ICI Fund Allocations (Cumulative)
OEFs & ETFs: Stocks 59.32%, Hybrids 4.24%, Bonds 18.32%, M-Mkt 18.11%

INTEREST RATES

CME FedWatch
Cycle peak 5.25-5.50%
Current 4.25-4.50%
FOMC 5/7/25+ hold
FOMC 6/18/25+ hold

Treasury

T-Bills 3-mo yield 4.33%, 1-yr 4.00%; T-Notes 2-yr 3.83%, 5-yr 3.92%, 10-yr 4.33%; T-
Bonds 30-yr 4.79%;
TIPS/Real yields 5-yr 1.61%, 10-yr 2.06%, 30-yr 2.56%
FRNs Index 4.245%
US SAVINGS I-Bonds rate from 5/1/25 – 10/31/25 is 3.98% (previous 3.11%); the fixed
rate is 1.10%, the semiannual inflation is 1.43%.
For current banking rates, see www.depositaccounts.com/
Stable-Value (SV) Rates, 5/1/25
TIAA Traditional Annuity (Accumulation) Rates
Rates up by +25 bps (1st increase since 12/2023)
Restricted RC 5.50%, RA 5.25%
Flexible RCP 4.75%, SRA 4.50%, IRA-101110+ 4.75%
TSP G Fund 4.250% (previous 4.250%).
The data above are as of Sunday preceding the publication date.

MARKETS

Indian stocks did relatively well during the US tariff-shock in April – their dip was shallow
& recovery strong. Sensex ($BSE) is already above both the 50-dMA & 200-dMA; the
same for India ETFs in the US, INDA & rupee-hedged INDH. Rupee also strengthened.
Indian defense stocks were strong after tensions rose between India & Pakistan
following the terrorist attack in Pahalgam/Kashmir on 4/22/25. Long international flights have become longer to avoid Pakistan’s airspace & some added brief stops for refueling. There may be a limited military response by India.

Swiss UBS sold its wealth & asset management business in India to 360 ONE (25%
owned by US Bain Capital). UBS will keep a 4.95% stake in 360 ONE; it will also
continue its investment banking business in India.

ECONOMY

India-US trade negotiations continue & a deal may be among the first to be announced.
While a general zero-for-zero tariff approach won’t be feasible, there may be some
areas with zero-for-zero tariffs. For example, the US is keen on no tariffs for its e-
commerce companies.  India can also reduce its trade surplus with the US with
purchases of LNG, fertilizers, defense equipment, commercial airplanes, etc. There may
also be some political pressure to reduce both the India-US trade surplus & India-China
trade deficit.  US Vice-President VANCE visited India, April 21-24, 2025. MUSK’s visit to
India maybe later in 2025.

There is a good opportunity for India to capitalize on intentions by countries to shift
production to India. This may require changing some laws on foreign ownership, sectors
that foreigners invest in & offering government incentives. Products with 35% value-
added in India are considered made in India, so, many Indian-made products
(electronics, pharma, etc) may have a majority of their contents from elsewhere (China,
Taiwan, S Korea, US, Europe). China is also looking for joint-ventures or minority stakes
in India (as well as in Europe) to bypass high US tariffs; it’s unclear whether US-China
trade negotiations have even started.

SPECIAL TOPICS

Facing high tariffs, Chinese airlines have canceled several orders for Boeing/BA
airplanes & some have returned (i.e. refused deliveries) almost finished airplanes to
Boeing. This may help several countries, including India, whose airplane orders are in a
long backlog. As for the returned planes, they would have to be reconfigured &
repainted with Boeing eating most of those costs.

Indian RIDESHARING industry is in turmoil after the collapse of BluSmart (Gensol
Engineering). While 2 big players Ola & Uber-India made no attempts to acquire
BluSmart’s business, private-equity firm Eversource Capital is in talks to do so. Several
government agencies & regulators are now investigating the scandal.

US-based Mati Carbon (CEO Shantanu AGARWAL) won a $50 million XPRIZE Carbon
Removal competition. Its “simple” solution was “enhanced rock weathering” (ERW) that
spreads alkaline crushed basalt rock (high in oxides of calcium, magnesium & iron). It
reacts with acidic water & CO2 mix in the rain to form bicarbonates that get washed into
streams & eventually into the ocean. Although this particular competition was sponsored
by Musk Foundation, XPRIZE Foundation that runs various competitions isn’t related to
MUSK’s “X”-entities. Mati Carbon is a public benefit corporation of a 501c3 entity.

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