⬆️US inflation bazooka
✔️European vacations getting cheaper
⛽Russian roulette for the Germans
IT stocks got hammered in trade, with the NIFTY IT index down 6.3% during the week🥊. Global market correction and Central Banks hiking rates putting pressure on headline indexes. Markets ended the week on a positive note, however, headline indices are down >1% during the week. Midcap indices was up 1.3% while Smallcap ended the week 🆙0.6%.
Earnings season kickstarted with cost pressures evident among the names. Management commentary seems to have turned cautious given the inflationary environment and concerns of global economic slowdown during 2nd half.😑
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CPI at 7% and WPI at 15% bring in some hope for inflation. Maharashtra was the latest to cut VAT on fuel products. However, let’s not jump the gun. RBI meets on 2-4 August and decides the fate of further rate hikes. Consumer discretionary spending has already started correcting due to monsoons and high prices⬆️
😋LIC finally declared its Embedded Value as of March 2022 at Rs. 5,41,492, close to the figure it declared in its RHP for Sep 2021 at Rs. 5,39,686. Thus currently, the MCap/EV for LIC stands at 0.83x.
Brent hovering around $100 with continued strengthening of the USD and global oil demand concerns with rising covid restrictions in China & fears of a global economic slowdown. S’pore Dubai GRMs continue its decline👎with moderation in petrol cracks to $18/bbl and diesel crack to $38/bbl. Chinese refiners have been lobbying to increase export quotas to benefit from record-high refining margins.🛢️
Around the world in 3 mins
Honey… where is my money?
According to Bloomberg reports, Chinese authorities are holding emergency meetings with Banks due to an increasing number of homebuyers refusing to pay mortgages on unfinished/stalled projects 😵💫
Tightening lending is further bad news to already weak home sales. ➖ve for metals and construction material players. Appreciating $ vs CNY further puts pressure on EM currencies, capital outflows intensify and deficits to ⏫
Repercussions in the property market of the world’s 2nd largest economy may creep into financial systems and financial contagion isn’t good news for global markets❌
Evergrande memories???😥
Equality after 20 years
The rising risk of recession, war on the border and emerging threats of crippling energy supply have culminated in USD=EUR😮, the first since 2002. A crucial psychological level of 1 being breached, signals a weakening of Eurozone sentiments.
Nord Stream 1 pipeline went into 10-day maintenance this week and investors fear Kremlin will take this opportunity to cut incremental energy supplies for good. German energy regulators have warned that electricity prices could triple in the coming year. Remember that the gas market is in short supply and winter demand is just months away💀
US tourists going to enjoy a cheaper European vacation😏
How’s the Josh???
Very Very HIGH SIR!!! 🚀
US inflation data making new highs every month with the latest print at 9️⃣.1️⃣% for the month of June on the back of super high gas prices. DXY continues the trend upwards and breached 109, the first since 2002.
Fed funds futures now indicate a 31% chance of a 100 bps increase, and a 69% chance of a 75 bps increase↗️. Korea, Canada, Singapore, Philippines were some of the countries to tighten rates this week, citing higher-than-expected inflation figures.
Indian IT names, major exporters of services to the US, continued their correction as investors fear discretionary spending to dry up in the 2nd half after the FED hikes the rate later this month. US banks (Morgan Stanley & JP Morgan) reported weaker numbers vs estimates, signalling a slowdown in the economy.
We are LIVEEEEEE…!!!!🚀
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This week in Numbers
$10 billion
Amount NASA spent on the James Webb Space Telescope (But honestly, pictures are worth every penny giving us existential crisis😍)
$51 billion
Amount Sri Lanka owes to foreign lenders. Inflation running at more than 50%
13
layers to go past to get a gun license in Japan, the highest in the world. Yet former prime minister, Shinzo Abe, was assassinated
Take a Kachow! break
(What we read, heard, and saw this week)
Why a price cap on Russian oil is a bad idea read more
Is it Possible to Bring Back Extinct Animal Species? read more
What to read to understand the history of Western capitalism read more
Is China Stumbling Into Its Own Mortgage Crisis? read more
Are Hallucinations a Feature of Psychedelic Therapy or a Bug? read more