10 key highlights from the recent GREED & fear report
Published by: Priyanka Deshpande
Fed funds futures market now expects only a 63% chance of a rate cut this year compared to 75 bps cut expected as early as mid-May.
#1
The widespread assumption in the Indian market is that domestic inflation pressures have peaked & that the next move will be a rate cut.
#2
Another Fed rate hike would raise the question of whether the RBI will feel obliged to raise the policy repo rate again to support the currency.
#3
India was the Asian economy with the biggest inflation issue at the start of last year, which is why the RBI was slightly behind the curve in the first half of 2022 in terms of combating inflation. This is no longer the case after 290 bps of RBI tightening.
#4
Fed will turn on a dime the moment there is any evidence of real weakness in the labour market.
#5
US stock market is more geared to AI than other equity asset classes, including emerging markets. GREED & fear has 18% of global long-only portfolio in Nvidia, ASML, TSMC and Samsung.
#6
Financial markets are ignoring the damage being done by ongoing monetary tightening cycle in the US. Yet, if interest rates will be higher for longer, it can only be bad news for the credit asset class.
#7
Nothing like ONDC has ever been tried before. It is likely to either be a complete flop or a massive hit.
#9
Advise investors to keep a close eye on the Morningstar LSTA US Leveraged Loan Price Index for any sign of a growing problem in the world of credit. Not much sign of problem yet as index is only 6.3% off January 2022 high.
#10