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

Dr K C Gupta, YBB Personal Finance

SENTIMENTS

AAII Bull-Bear Spread +18.2% (above average)
$NYA50R, NYSE %Above 50-dMA 70.87% (overbought, barely)
$SPXA50R, SP500 %Above 50-dMA 76.00% (overbought)
Delta MSI 81.1% (overbought)

ICI Fund Allocations (Cumulative)

OEFs & ETFs: Stocks 61.04%, Hybrids 4.45%, Bonds 17.89%, M-Mkt 16.63%

INTEREST RATES

CME FedWatch
Cycle peak 5.25-5.50%
Current 4.75-5.00%
FOMC 11/7/24+ cut (the meeting after the US elections)
FOMC 12/18/24+ cut

Treasury

T-Bills 3-mo yield 4.73%, 1-yr 4.20%; T-Notes 2-yr 3.93%, 5-yr 3.81%, 10-yr 3.98%; T-Bonds
30-yr 4.26%;
TIPS/Real yields 5-yr 1.67%, 10-yr 1.75%, 30-yr 2.04%;
FRNs Index 4.552%
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% (new data pending on 10/10/24).

For current banking rates, see www.depositaccounts.com/

Stable-Value (SV) Rates, 10/1/24
TIAA Traditional Annuity (Accumulation) Rates
Restricted RC 5.00%, RA 4.75%
Flexible RCP 4.25%, SRA 4.00%, IRA-101110+ 4.25%
TSP G Fund 3.875% (previous 4.000%)

Due to publication lag, the data above are as of the Sunday preceding.

MARKETS

For the US markets, September was positive (a rarity) & those have been followed by positive Q4 79% of the time; the SP500 6,000 isn’t far. The wait now is for October to be over before the good seasonality starts November 1 – April 30. The US Fed’s jumbo rate cut & CHINA easing have benefited the EMs (India down -3.75% for the week) & commodities.

INDIA is now #2 steel producer globally. But its steel imports are also at 6-hr high (from China, 7-yr high). Some of the imports are specialty steels. But this also indicates high domestic steel consumption that correlates well with economic growth. The Government may impose tariffs on imported steel to protect the domestic steel industry. It also means that despite political & border frictions, the India-China trade is significant & growing. There is even talk of resuming commercial flights between the two.

RCEP (Regional Comprehensive Economic Policy, 2022- ) is a global free-trade agreement (FTA) among 15 Asia-Pacific countries. But INDIA won’t join RCEP because of concerns that China may exploit the RCEP just as it did the WTO. India will rely on existing multilateral & bilateral FTAs.

A recent story in Barron’s featured INDIA. It also noted that India now has the highest EM weight in the MSCI All-Country IMI (investible) index, ahead of China & just behind (developed) France. The Indian stock market has tripled since the pandemic low 4.5 years ago. With 5,000 stocks in India, values can be found in consumer sectors – autos, foods and snacks, food delivery, mobile/telecom, life insurance, residential real estate. But the growth & action aren’t in Indian large-caps where typical foreigners tend to invest. Billboards for IPOs abound in India just as for movies, shows, and games. Beware that Indian small/mid-caps can be very volatile.

Several INDIA ETFs in the US have been featured in the recent issues – INDA (8/16/24), EPI (9/13/24), INDH (9/13/24), NFTY (9/27/24). Other more specialized ETFs are:

SMIN – India small-caps
INCO – India consumers
INQQ – India Internet
DGIN – India Digital
INDF – India financials
PIN – India quality & yield
INDL – Leveraged +2x

The abovementioned ETFs are passive, but there are some active ETFs.
INDE – India Active
IOPP – India Active

RETIREMENT

MEDICARE open enrollment period (OEP) is from Oct 15 – Dec 7. As there are many changes for Parts B, D, C/MA, don’t just throw away the recent notices you got about them; drug formularies may change too. Part D will have $2K out-of-pocket limit for covered drug costs.
Medicare Advantage/C plans face higher costs & tighter government reimbursements, & many insurers are curtailing or exiting the MA/C market. If your MA/C plan is discontinued, & you don’t do anything, you will be enrolled in the original Medicare & will have the opportunity to get Medigap insurance without medical underwriting; normally, it’s hard to go back from MA/C to original Medicate due to the underwriting required for Medigap insurance. Also make sure that your doctors are still in the plan.

For more information, see ybbpersonalfinance.proboards.com/