AKG weekly charts - Issue #111
This newsletter is a weekly selection of 10 charts hand-picked across the internet which pertains to our investment strategy and bring an updated insight and perspective.
FC August 2023 newsletter - Paring down of Portfolio risk (read here)
Summary of financial markets in last week (14-18 August) here
Media interaction last week with News9 here and with Business standard here.
[1] China and Japan are the two major economies which haven’t hiked interest rates since GFC 2008 and now pushed by the slowing growth, rates are being cut across time horizons.
PS : Also read the twitter note here - Japanification of China.
[2] Earlier we had seen (Edition 110, Chart #2, here) how US spending in next 10yrs will be equivalent to WW2 spending. On top of that, US government interest expense on the debt has been rising exponentially since Covid Stimulus package.
What if the debt can’t be issued because it can’t be served? Oh, credit event!
[3] The renewed interest in bonds comes as the U.S. Federal Reserve and European Central Bank get close to the end of their aggressive rate-hiking cycles, potentially bringing two years of bond-market suffering to a close. The turn of the bond markets are usually most painful for equity markets. Will history repeat itself?
[4] Taking 8 US recessions since 1970 avg gap between 1 st month of inverted curve and onset of recession is about 350 days Period of waiting has varied from 6m – 17m: Based on this, recession could also arrive by April 2024 or as early as Oct 2023.
Source : Federal reserve bank of St. Louis
[5] The Polymer Drums market of India is expected to grow in terms of revenue at CAGR of 9.87% from FY22 to FY30 and the MS Drums market of India is expected to grow in terms of revenue at CAGR of 7.95% from year 2022 to 2030 across chemical, agrochemical, speciality chemical and pharmaceutical companies.
PS : See FC IPO notes on Pyramid Technoplast IPO here
Connect on various social media platforms here
Subscribe to (free) AKG weekend readings newsletter here
Follow #FCOTTReco and #FCBookReco on our Twitter page here.
[6] The US Strategic Petroleum Reserve (SPR) continues to be drained. Oil reserves have declined to 354 million barrels, levels not seen since 1983. The SPR has been drawn down 51% from its high in 2020, which has contributed to a lower official CPI inflation number.
[7] Fund managers consider Big Tech the most crowded trade as tech allocation has risen to the highest OW since Dec’21, BofA find manager survey highlights.
[8] Only $200 billion is left in excess savings, which is keeping households afloat 2 months ago, this number was at $500 billion At current rate, savings will be depleted by Sept 2023 in US.
[9] The equity risk premium (ERP) has fallen to its lowest level since 2007 Indicating that stocks are very expensive relative to bonds in US atleast.
[10] China’s 40y boom is over. What comes next? The economic model that took the country from poverty to great-power status seems broken, and everywhere are signs of distress.
Disclaimer:
This newsletter is for information and educational purposes only. In this material, Amit Kumar Gupta (SEBI registered Research Analyst, INH100009327) has used information that is publicly available and is believed to be from reliable sources. While utmost care has been exercised, the author does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Readers, before acting on any information herein should make their own investigation & seek appropriate professional advice. Any sector(s)/ stock(s)/ issuer(s) mentioned do not constitute any recommendation and the RA may or may not have any future or existing position in these. All opinions/ figures/ charts/ graphs are as on date of publishing (or as at mentioned date) and are subject to change without notice. Any logos used may be trademarks™ or registered® trademarks of their respective holders, our usage does not imply any affiliation with or endorsement by them. Past performance on charts may or may not be sustained in the future and should not be used as a basis for comparison to infer any investment ideas