Market Insights: February 2024

February saw a further divergence in the performance of fixed income and equities investors as economic resiliency continued to drive down expectations for rate reduction. Key Points Equity Five of the “magnificent seven” US stocks released their results for the previous quarter as earnings season began. In general, these businesses matched or above projections, which […]

Market Insights: January 2024

Two of the eight indexes on our world watch list have posted gains through January 22, 2024. Tokyo’s Nikkei 225 finished in the top spot with a YTD gain of 9.21%. The U.S.’s S&P 500 finished in second with a YTD gain of 2.27% while India’s BSE SENSEX finished in third with a YTD loss […]

Market Insights: December 2023

U.S. Dow hits record high in broad advance The S&P 500 Index, Nasdaq Composite, and Dow Jones Industrial Average recorded their seventh consecutive week of gains—the longest streak for the S&P 500 since 2017, according to Reuters. The gains lifted the first two benchmarks to 52-week highs and the Dow to an all-time record. […]

Market Insights: A Recap of November 2023

Risk-on tone was hindered, with equities slipping while bonds and dollar gained in the pre-Thanksgiving trading. FOMC minutes garnered little reaction, while commentary from BOE officials was more hawkish. GBP turned out to be the G10 outperformer while EURUSD reversed back to 1.09. Copper surged to fresh two-month highs and Gold looked over $2k. […]

MARKET INSIGHTS

In the world of finance and global markets, staying informed is crucial for investors and analysts alike. The market insights from October 23, 2023, provide a snapshot of key events and trends that are influencing various asset classes, from gold and oil to stock markets in the US, Asia, and Europe. The interplay of factors […]

September PMIs show further economic weakness in Europe

Preliminary PMI data for the Eurozone and the UK released at the end of last week showed a further weakening in economic activity in September. The Eurozone composite PMI improved slightly to 47.1 from 46.7 in August, as the relative strength of services offset a further decline in the manufacturing PMI to 43.4. Germany’s manufacturing […]

Mastering Strategic Investing: A Comprehensive Guide

Strategic investing is a proactive approach to growing wealth that goes beyond simply picking stocks or assets at random. It involves careful planning, research, and an understanding of market trends and economic factors. Whether you’re a novice investor or someone looking to refine their investment strategy, this guide will help you navigate the world of […]

GIFT City FIF: A Gateway for Indian Families for Hassle-free Offshore Investments

GIFT City, an International Financial Services Centre (IFSC) located in Gujarat, India, introduces the Family Investment Fund (FIF), providing Indian families with a convenient avenue for offshore investments. The FIF allows affluent families to pool their resources and invest in various domestic and international asset classes. The key advantage of the FIF is its ability […]

Private Credit Report

In 2022, more than half of India’s private credit transactions were carried out by global funds Private credit investments accounted for about $5.3 billion across 77 transactions in India. This trend is likely to remain robust over the next 1-2 years.Half of these deals were under the average ticket size of $40 million, with a […]

Rising interest rates will strain, but not Break banking systems

Rising interest rates have caused turmoil in the banking sector. This may prompt a slowdown in lending, but not a repeat of the 2008-09 financial crisis. This year has seen turmoil in US and European banking markets. In mid-March the collapse of Silicon Valley Bank (SVB) and Signature Bank, two regional US banks, heightened investor […]

Private Equity Report

India witnessed a funding slowdown in 2022, with a 31% fall in PE/VC investments to November 2022 compared to those in YTD 2021. PE/VC firms invested US$46,786 million in 1,260 investments in 1,181 companies in 2022, compared to US$65,000 million in 1,362 deals in 2021. Despite this, 2022 turned out to be the second-best year […]

Economic Outlook

The economic outlook will remain challenging in 2023. Rapid interest rate hikes from 2022, decades high inflation and the last vestiges of the pandemic are set to cause global growth to fall to recessionary levels. We see Europe suffering a prolonged recession in 2023 and the US to fall into recession in the second half […]

Russia’s invasion of Ukraine

Commodity – Embracing Change

The easy money era ended last year, as the U.S. Federal Reserve raised rates at the fastest pace since the 1980s to control 40-year high inflation. The COVID-19 pandemic has eased, the Russia-Ukraine conflict has reached a stalemate, and the global economy is now adjusting to long-lasting impacts that will usher in new investment themes. […]

Equity Bonds

Equity-Bonds Correlation and Diversification

The world in general and financial markets in particular have experienced a long list of shocks in the past few years: global trade tensions; the COVID-19 crisis; massive liquidity injections and fiscal transfers to households leading to supersized demand for goods; disrupted manufacturing and supply chains; and the energy price shock. While the resulting spikes […]

EM economies

Emerging Market Economies – Outlier India

In the context of tightening global financial conditions, a stagnating world economy, and a stronger US dollar, some of the emerging economies are struggling to catch up, especially those that were already lagging behind in the global post-pandemic recovery story. While headline inflation seems to have peaked in low-income economies, where food and energy comprise […]

Bonds Market

Bonds Market More Volatile Than Ever

U.S. bonds have been under a lot of stress this year, with prices falling and yields rising. With the Federal Reserve raising interest rates in order to stay on its policy-tightening path, Treasuries have seen bouts of selling that have propelled yields higher. Consider that the 2-year Treasury yield hit 4.67% recently, its highest level […]

Rising Interest Rates & Increasing Volatility in Global Markets

Financial conditions have tightened as central banks continue to hike interest rates. Amid the highly uncertain global environment, risks to financial stability have increased substantially. Major issues facing financial systems include inflation at multi-decade highs, continuing deterioration of the economic outlook in many regions, and persistent geopolitical risks. To avoid inflationary pressures from becoming entrenched, […]

China’s Reforms Increase Asia’s Appeal in the Global Bonds Market

During the pandemic, central banks in both advanced and emerging market economies took unprecedented measures to ease financial conditions and support the economic recovery, including interest-rate cuts and asset purchases. With inflation at multi-decade highs in many countries and pressures broadening beyond food and energy prices, policymakers have pivoted toward tighter policies. The monetary policy […]

China’s Slowdown Indirectly Helping Inflation Control in Other Parts of The World

China’s property crisis seems to be deepening as a growing number of households refuse to make mortgage payments on properties, they bought but are yet to be completed. This mortgage boycott, which now involves around a million households, could cause China’s property crisis to spread to the country’s banking system. That, in turn, threatens to […]

Russian Natural Gas Cut-off denting Europe’s Economies

Russia’s invasion of Ukraine has further darkened the global growth outlook, with the European economy facing a serious setback given the trade, investment, and financial links with the warring countries. Now, Europe is enduring a partial cut-off of natural gas exports from Russia, its largest energy supplier. The prospect of an unprecedented total shutoff is fuelling concern about […]

Recession

Recession Risk Assessed Carefully

Investors have had to contend with a lot over the past six months: high and sustained inflation, an accelerated pivot toward tighter monetary policy, Russia’s invasion of Ukraine, and big drawdowns in both stocks and bonds related to these headwinds. And while post-pandemic economic tailwinds and the resilience of corporate earnings have kept investors hoping […]

US Federal Reserve’s

The US Federal Reserve’s Attempts at Curbing Inflation

The US Federal Reserve raised its main interest rate by three-quarters of a percentage point, the biggest increase since 1994. Data suggests the Federal Open Market Committee (FOMC) may need to act more decisively to slow consumer and business spending and the job market to bring prices under control. The raise was widely as per […]

Global Financial Crisis

Is High Inflation Back For Good?

High levels of inflation in most advanced economies are starting to make some policymakers and households nervous. The recent rise in U.S. government bond yields and inflation expectations shows that some investors are worried about getting burned as last spring’s lows roll off year-over-year calculations and pent-up consumer demand is likely unleashed. The 2007-08 Global […]

Inverting Yield Curve – Forerunner of a Recession?

Inverting Yield Curve – Forerunner of a Recession? There have been a lot of headlines around the bond market flashing warning signals about the growth prospects for the US economy which have prompted the investors in stock markets to panic. The investors were already grappling with the geopolitical tensions between Russia and Ukraine and the […]

Outlook 2022

Global Growth Rates Hit the Skids

Beyond the suffering and humanitarian crisis from Russia’s invasion of Ukraine, the outcome of the unfolding events in Eastern Europe, along with continued concerns about COVID-19, appear to be considerably reshaping the global economy and its structure. Although assessment is still ongoing, global economic growth will be impacted negatively due to the knock-on effect of […]

Outlook 2022

Russia-Ukraine Tensions – Adding further to Inflation worries?

Tensions between Russia and Ukraine are at their highest in years. These geopolitical issues between Russia and Ukraine have kept investors on the edge in the past few days. Let us see how these issues are likely to impact the stock market. To start with we need to know “What is the Russia-Ukraine Issue”? 1991 […]

Outlook 2022

Macro Vs Micro Vs Liquidity!! Who takes the cake?

Author: Ajay Mohanty, Head of Investment Advisory at Xanara There is a saying in Cricket that “It’s a see the ball, hit the ball game! If you don’t watch the ball closely enough you are not going to hit it too far!!” The same thing applies to Financial Markets “Sometimes watching the price action closely can tell much […]

Outlook 2022

India Market Outlook 2022

After a tough year for the Indian economy, as a nascent recovery took hold, 2022 is likely to bring with it spikes in market volatility, higher interest rates, and elevated inflation. A focus on opportunities in long-term investment themes, in a diversified portfolio, seems one way to manage the next twelve months. India’s economic […]

Outlook 2022

Equity Outlook 2022

2022 is going to be different 2021 was a mixed bag with major indices touching their all-time highs while most of the stocks were near their 52-week lows towards the end of the year. No doubt that investors have made huge profits with markets rallying for the first 10 months. High liquidity, growth in […]

Outlook 2022

Private Equity Outlook 2022

Private equity deal activity is moving at a scorching pace. Driven by strong investor interest in business products and especially technology, PE deals are being completed at the fastest clip in at least 20 years Following pent-up demand from a cautious 2020 driven by COVID-19 uncertainty, PE deals were expected to climb but the pace […]

Outlook 2022

Is Inflation really ‘transitory’ or here to stay?

In 2021, the prices of goods and services rose more than they did in any year since 2008, leading to concerns about the potential impact on consumer spending, interest rates, and corporate margins. We think inflation will fall from currently high levels over the course of 2022. While the downtick in Inflation may be gradual […]

Outlook 2022

Fixed Income Outlook 2022

The question for 2022 is at what speed will yields “normalise” and what does “normal” look like? Another important focal point is how various segments of the bond markets behave as fiscal and monetary support is withdrawn. The answer will dictate prospects for the asset class. This has been a rollercoaster year for global bond […]

Supply Chain Bottlenecks: The biggest traffic jam.

Author: Drishti Dhakan, Investment Analyst at Xanara Last year the global economy came juddering to a halt. This year it got moving again, only to become stuck in one of history’s biggest traffic jams. We are seeing supermarkets with empty shelves and ports where ships are stuck up far offshore. Container shipping rates, for […]

S&P500 – Is the Upside Capped from Current Levels?

Author: Harshita Bhonsle, Investment Analyst at Xanara A correction in S&P500, or even the thought of it striking in the near future, is bound to make investors panic. However, it’s essential to understand that corrections are a part of market dynamics and investors shouldn’t let panic take over. Instead, investors should prepare if there’s […]

Tapering: Deciphering the Tantrum

Author: Drishti Dhakan, Investment Analyst at Xanara The financial world is often recognized for inventing new definitions for old words, and then constantly referring to these new terms as if everyone should know what they mean. One such recent terminology is “tapering”. The “tapering” terminology entered the financial vocabulary on May 22, 2013, when U.S. […]

Outlook 2021

China: Trying to Bring Some “Method” to the Madness!

Author: Ajay Mohanty, Head of Investment Advisory at Xanara Most investors are currently grappling with the age-old trade-off of avoiding trying to catch a falling knife vs bottom fishing and trying to get a few bargain buys. There is one element that is constant and change, we need to understand the change and how it will impact […]

Outlook 2021

Plunging Yields: Technical correction or genuine growth scare?

Markets are like pendulums. They go too far in one direction and then go too far in the other. They say ‘Never say Never’ in markets, more so when the consensus call is for a certain trade. Betting against the price of US government bonds was a winning play earlier this year with hedge funds, […]

Outlook 2021

Just how Transitory is the ‘Transitory Inflation’?

The use of the word “transitory” could very well turn out to be transitory. Powell may need a new catchphrase to describe how inflation might be a bit stickier and thornier problem. Is higher inflation technical, transient, or structural? There is a clear technical element. Massive lockdown-driven declines in March, April and May 2020 did cause the […]

Outlook 2021

Black Swan Vs Grey Rhino

Financial markets have an uncanny fascination with animals and birds. We have all heard of doves and hawks that are the talk of the town in monetary policy meetings of most central banks. But let’s leave these flying birds for another day. Today, let’s talk about Black Swans and Grey Rhinos. Black Swans and Grey […]

Outlook 2021

Volatility: Scary Thought or A Necessary Evil ?

It is well documented that equity bulls don’t like uncertainty. There’s an inverse correlation between volatility and equity returns, which is very strong. Intuitively, it makes sense. A lower volatility means investors are less worried about the risk associated with their investments and they don’t have to scramble to buy protection or hedges. In simple […]

Outlook 2021

Investing In India: How Does It Fit Into The Jigsaw Puzzle Of A Global Portfolio

Investment opportunities in emerging markets are something global investors simply cannot ignore because they give the much-needed kicker to the portfolio. Investment Rationale The strategic rationale for investing in emerging markets like India can be summarized as under: High long-term growth rates than developed markets and more favorable demographic profiles Lower levels of government indebtedness […]

7 Ways Wealth Managers Can Help You Meet Financial Goals in the New Normal

Outlook 2021

March FOMC Preview: Fed Faces Fine Balancing Act

In the last week, the European Central Bank came forward and made a forthright statement that it expects to increase its bond purchases “significantly” next quarter, after borrowing costs rose in the region. Will this nudge the Fed into something similar? Well looks unlikely given the recent narrative from the Fed. There has been a […]

Outlook 2021

US Dollar and Rates are Variables That Deserve Attention at a Time When Assets are Priced to Perfection

With the markets well ahead of the fundamentals and as money continues to chase performance, the ‘risk’ remains elevated. Consensus or “crowded trades” can be taken as a contra signal because ‘when all experts agree, something else is bound to happen’. Markets have an uncanny knack for luring investors into a sense of complacency before […]

Outlook 2021

S&P 500 Earnings, What is Baked in Vs. What is Dished out!

Markets have been on the rampage riding on the back of Monetary and Fiscal Stimulus. While the fear of missing out has ensured most investors sitting on the fences truly jump into the playing field, experienced investors will tell you that “we normally overestimate what we can achieve in the short term and under-estimate what […]

Outlook 2021

Equity: What is the style for 2021

2020 has been the sort of year that makes people naturally look forward to 2021. Even though the stock market has done well this year, it has come along with dramatic volatility. Wall Street’s finest are starting to come out with their stock market projections for 2021, and there is a lot of optimism among […]

Outlook 2021

US and Euro Zone Fixed Income Outlook

We do not expect any hikes from the Fed/ECB through 2021 and 2022, but the market could increase its pricing of an eventual normalization, given the consistent projected growth rebound. The Fed’s average inflation targeting suggests low short-end rates for longer. While the near-term growth path may prove bumpy, low macro volatility following recent positive […]

Outlook 2021

The Central Bank Put came to the rescue in 2020, 2021 brings new Challenges

Central Banks are rightly credited with stabilizing bond markets earlier this year in large part through unprecedented amounts of liquidity creation. Compared to the Global Financial Crisis, this time we saw much lesser interest rate cuts but significantly more balance sheet expansion. It is important to note that a Central Bank Balance sheet is not […]

Outlook 2021

India: On the cusp of a cyclical recovery

India could well be the fastest growing Asian economy in 2021 with GDP growth expected within touching distance of the double-digit mark. India is on the cusp of a cyclical recovery. However, Structural balance sheet challenges remain, particularly elevated non-performing assets in the financial sector, constrained fiscal space and a corporate sector focused more on […]

Outlook 2021

Private Equity markets braved the storm successfully just like listed equities

It is safe to say that 2020 defied expectations for most investors, and PE managers were no exception. Deal flow nearly ground to a halt in March but has since recovered rather quickly. Fundraising is on track for another banner year, although emerging managers—first-time funds—have had a difficult time in a virtual environment. Exits have […]

Advisors’ Bulletin

Stay ahead of the curve.