AKG weekly charts - Issue #112
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.
Summary of financial markets in last week (21-25 August) here
Media interaction in last week with Moneycontrol here and here.
July 2023 review of our strategies - Special Situation and Wealth Compounders
[1] Goldman Sachs strategists expect home prices to stop decline this year. The gauge is based on household income, housing prices, and mortgage rates. Rather than a 2.2% slide for 2023, the bank now expects a 1.8% increase thanks to persistent inventory snags and other factors juicing Americans' demand for homes.
[2] The Congressional Budget Office predicted that federal debt held by the public will grow to a record 107% of gross domestic product by 2029 and soar to 181% by 2053—a debt burden that would far exceed all previously recorded levels.
[3] Sentiments on current income improved further and moved to an optimistic zone for the first time in four years; future earnings expectations remain buoyant in India
[4] The current perception of the economic situation, employment, and inflation has worsened recently in India. It has persistently remained negative since July 2022.
The expectation for one year ahead regarding economic situation, employment, and spending has also worsened as compared to May 2023 survey. Though it still remains in positive territory, it has not shown any material improvement since July 2022.
It is fair to say that the future expectations of improvement are driven more by hopes rather than any substantive basis.
[5] US 30yr mortgage rates are now at 2000 levels. How long before anything breaks? It’s a matter of time. Rate cuts then to defuse the situation may not be sufficient. Fed will wait to cut till danger level is reached?
[6[ The real neutral rates in US are now highest in last 40 years. Monetary policy has become highly restrictive. Brace for Impact!
[7] Some of US’s top Middle Eastern allies – incl world’s biggest oil exporter – moving closer into orbit of China & Russia, further complicating geopolitics. Saudi trade with China & India reached record of $175bn last year. It was barely $5bn at start of century.
[8] The use of the word "job automation" since 1800. This only goes up to 2019 (pre chat GPT). Chat GPT will accelerate job losses in selective sectors. Structural unemployment will be a major theme over the next decade.
[9] India’s electricity demand during the monsoon has seen to be much higher than during the summer! This happens rarely and no wonder many of the Power ancillary stocks are too excited in the markets!
[10] Gold USD correlation has not been consistently inverse. Reason lies from economic to cultural and the boom/bust/stabilization phase (in that order) for Cryptocurrencies. I have said many times before (See here, here and here), Gold is a trading bet, not an investment bet. Beware of Gold ETF sellers with vested interests!
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