Previous Research Predicting Bond Yields with Copper-to-Gold Ratio
India has experienced a consistent influx of positive FII flows over the past four months, and it appears that this trend is continuing into the current month as well. These FII flows have demonstrated a positive correlation with the index returns, resulting in significant gains for the index over the same four-month period.
While FII flows are generally viewed as positive, it is important to note that these flows do not impact every sector equally. For instance, the IT sector has remained out of favor and experienced negative flows in June, whereas sectors like financials have witnessed substantial inflows. Understanding which sectors receive these flows can provide an added advantage.
Adopting a strategy of piggybacking on FII flows can be highly profitable. This is because institutions typically invest in companies for longer holding periods. Therefore, while there may be a possibility of missing out on initial gains, there is still potential for significant returns over a one-year period.
Can US Skip the Recession?
The most recent labor market data paints a concerning picture of overall weakness. Typically, the effects of changes in interest rates take some time to ripple through the economy. Historically, this lag has been around 18 months. Interestingly, this pattern held true as, precisely 18 months after the initial rate hike in March 2022, we are now witnessing the visible impact this month. The Federal Reserve consistently raised rates throughout 2022, suggesting that the consequences of these consecutive hikes will continue to materialize as the year unfolds.
SP500 & Inflation Update: Aug 2023
Airtham Macro Research: The July headline CPI release followed predictions of a slight increase, yet the actual magnitude was less significant than anticipated. This outcome sparked optimism within the market, leading to a surge in activity and speculation of a potential pause in rate hikes. However, this optimistic rally was short-lived as market participants quickly adjusted their expectations. The weaker-than-expected inflation reading meant a potential decline in economic demand. This perspective gains support from jobless claims data released a few days back, that showed claims rising to a 1.5-year high. Consequently, there's now a debate over whether further inflation reduction is beneficial or detrimental to the markets.
What’s Happening to US Tax Receipts?
One of the most crucial indicators for gauging the health of a country lies in its government tax receipts. When tax receipts rise in tandem with economic growth, it signals a thriving nation. Conversely, economic downturns often witness an accompanying decline in tax receipts. However, what's truly concerning is when tax receipts decline despite a healthy and expanding economy.