AKG weekly charts - Issue #118
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.
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[1] Bank credit has officially entered contraction territory in US. Credit has gone from 10% in Aug 2022 to -0.6% in Oct 2023. This is the result of tight monetary policy by the Fed. Since 1974, bank credit has contracted only once - during Global Financial Crisis.
[2] China had a capital outflow of $49 billion in August, the largest monthly outflow in almost 8 years. Investment outflows are accelerating. China+1 to accelerate too?
[3] Auto Loan Delinquency rate jumps to all-time record high of 6.1% in US. High rates is leading to car EMIs being defaulted by atleast 60 days. Hot economy but not in the best of the sense.
[4] Small Cap Stocks continue to get obliterated as the Russell 2000 closes at its lowest price in more than a year in US. In India, Nifty Smallcap 100 briefly made a new ATH in last week. How long will this divergence last? (Hint: Ask Mr. Dollar index)
[5] The gap between current mortgage rates and the effective rate of mortgages outstanding is the widest its been in more than 40 years in US. Accidents waiting to happen. How long it will be delayed is anyone’s guess!
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[6] China's 2022-23 economic weakness may be due more to the property market contraction rather than zero COVID. With multiple bankruptcies and high share of Real estate sector (~25%), scenarios are getting precarious!
[7] Investors ditched renewable energy funds at the fastest rate on record in the three months to end-September as cleaner energy shares took a beating from higher interest rates and soaring material costs, which are squeezing profit margins. Will this impact lofty valuations in clean energy stocks in India too?
[8] Hiring for formal jobs as per Naukri JobSpeak Index is back to Covid levels. On the other hand, EPFO which is a measure of payroll employment and formal job creation in the country is seeing constant additions. There is a divergent narrative which can only be understood with some scuttlebutt at ground level and it’s not a pretty picture. K-shaped recovery is getting stagnated at both ends!
[9] Self-explanatory. Even the debt is getting cornered by the top 10 countries which now accounts for 70% of the total issued IMF Debt. Sequencing order of World bank debt is also on similar lines!
[10] FMS are anticipating and front running in their positions that Bank of Japan may scrap its yield-curve control and put an end to negative interest rates as early as 2023. Banks have surged more than 50% over the past year on speculation gains in prices and wages will become sustainable enough for the BOJ to end years of rock bottom rates that have crushed their income.
All hail Buffet who was first public figures to identify the trend in 2021
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