AKG Weekly Charts - Issue #90
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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Summary of last week in financial markets here
[1] CARE Ratings has highlighted that “Credit growth has generally been trending upward throughout FY23 and remained robust in recent months even amid the significant rise in interest rates.” The report pointed that “Retail and NBFCs have been the key growth drivers for FY23. Besides, demand for capex too is expected to drive industry credit growth.”
[2] For the fortnight ended January 27, 2023, deposits with scheduled commercial banks (SCBs) stood at Rs177.2trn. The current deposit base is higher by Rs12.5trn as compared to the beginning of FY23. Bank deposits growth continues to lag the credit growth resulting in gradual rise in credit to deposit ratio.
[3] Copper is optimistic about the economy. Bond market signals a recession in the US w/the yield curve deep in inversion. No one really knows who is going to be right by CY23-end!
[4] With interest rates rising & debt levels going up, debt servicing costs are rising for US. An educated guess would be that dollar index has likely topped out for the forseeable future. If it doesn’t, we will be struggling big time with debt defaults and bigger recession in 12m time!
[5] US Jan PCE (Personal consumption expenditure, Fed’s favouite inflation indicator) was too hot to handle for markets. Headline PCE came in +5.3% YoY vs +5% expected. Core wasn’t any better, coming in at +4.7% YoY vs +4.3%. Rates beyond 5.25-5.50% range possible?
[6] Housing is less affordable now than during the peak of the 2007 housing bubble! As counter intutive as it may sound, the K-shaped recovery continues…
[7] China has emerged from the pandemic as an auto export superpower. Thanks to BYD which is now selling 5x the number of cars in China than and they didn’t even have any models a couple of years ago!
[8] The number of USFDA approved plants declined in 2019 and has not reached the peak level till date. However, USFDA inspections increased substantially between 2015-19 mainly due to heightened USFDA scrutiny as well as increased filing of complex products, which have triggered additional inspections. Focus on complex products has increased due to stiff competition in conventional products. Likely that USFDA inspections would reach 2019 levels in the near term.
[9] Europe had good luck in the form of mostly balmy weather during the winter, when gas consumption soars. Now that prices are back to Covid levels, one can expect the gas companies to start cutting it for consumers and industries with a lag.
[10] Buffet shareholder letter at the end of Feb is always eagerly awaited. At 4,455 words, it was shortest letter in 44yrs. Too many references to the mistakes and little to the new developments. [Read here]
Disclaimer:
This newsletter is for information 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 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 may or may not be sustained in the future and should not be used as a basis for comparison to infer any investment ideas.