Tag: reading

Sunder’s List: It Happened One Night

Roundup: S&P +1.66%, Dow +1.84%, Nasdaq +1.15%, Gold $1218.60, London +0.09%, Germany +1.06%, France +1.00%. At pixel: Nikkei +1.60%, Hang Seng -0.02%

The Fed announces a $10B per month taper. Treasury purchases cut to $40B per month. MBS purchases cut to $35B per month.

Fed also noted that it likely will be appropriate to maintain the current target range for the fed funds rate (0.0% – 0.25%) well past the time that the unemployment rate declines below 6.50 %, especially if projected inflation continues to run below the committee’s 2% longer-run goal.

Analysts reactions (WSJ): “step in the right direction”, “this is a very dovish taper-lite”, “both the ECB and BoJ have a lot to lose from FX appreciation and the pressure will be on them to ‘out-dove’ the Fed.”

South-east Asian markets are hoping “The rally in U.S. equities will be contagious for all Asian stock markets today.” (WSJ)

The test now is to see whether Vice Chairwoman Janet Yellen, who will likely replace Ben Bernanke in February, can keep markets in check as the Fed continues down this path of normalizing monetary policy. (WSJ)

The RBI kept the repo rate unchanged at 7.75% despite high inflation. It may have to hike interest rates in January if high inflation persists. (LiveMint)

Good luck!

Sunder’s List: What Will The Fed Say?

Roundup: S&P -0.31%, Dow -0.06%, Nasdaq -0.14%, Gold $1234.30, London -0.55%, Germany -0.86%, France -1.24%. At pixel: Nikkei +1.61%, Hang Seng +0.43%

US Federal Open Market Committee is expected to issue a statement today. While the Fed isn’t expected to start winding down its purchases of $85 billion a month in bonds until March, recent stronger-than-expected economic data increased the odds that tapering could occur sooner. (Yahoo)

Raghuram Rajan wants private equity groups such as KKR and Blackstone to take over distressed companies. The “strong” companies that they have taken over have turned distressed, fat chance that they will be interested in already distressed cos. (FT)

RBI is worried about the growing size of bad loans in India’s Rs.81 trillion banking sector. About Rs.2 trillion of these loans are bad and at least Rs.4 trillion are being restructured. Together, that constitutes about 10% of all bank loans. (LiveMint) [stockquote]BANKBEES[/stockquote]

Meanwhile, the amount of stressed debt may go up by more than 50% for BSE 500 companies if the RBI decides to raise the policy rate cumulatively by more than 50 basis points till March 2014. This could unleash a second wave of restructuring and non-performing assets. (ET)

GlaxoSmithKline (GSK) intends to end two common industry practices that appear to cause conflicts of interest: paying doctors to promote the company’s drugs and linking the compensation of sales representatives to the number of prescriptions that physicians write. GSK will also stop paying healthcare professionals to attend medical conferences. (SA) [stockquote]GLAXO[/stockquote]

Suzuki will shift its entire export operations for the Middle East, Africa, Latin America and South-East Asia to India by the end of the next fiscal year. (LiveMint) [stockquote]MARUTI[/stockquote]

Good luck!

Sunder’s List: Bye Bye Gold

Roundup: S&P +0.63%, Dow +0.82%, Nasdaq +0.71%, Gold $1241.20, London +1.28%, Germany +1.74%, France +1.48%. At pixel: Nikkei +0.99%, Hang Seng +0.37%

Holdings in the 14 largest gold ETPS have plunged 31%. The removals erased $69.7 billion in the value of the assets as prices fell by the most since 1981. (Bloomberg, #gold) Perhaps it is because instead of inflation, developed countries are fighting deflation and instead of economies crawling back to the stone age have finally started looking up.

Increase the price you pay farmers and decrease the price you charge consumers and then wonder why Indians prefer to buy gold and shove it under their mattresses. (yesterday, today)

Non-resident Indian foreign currency deposits are camouflaging a domestic deposit crisis. Domestic deposit growth adjusted for FCNR flows of $34 billion is 12.8%, way below the central bank’s comfort zone of 14% deposit growth for the year. (ET)

Auto firms want govt to replicate cash-for-clunkers scheme in India. Customers will receive concessions of up to Rs.1 lakh in taxes if they sell vehicles older than 15 years. The scheme is expeted to generate Rs.31,332 crore revenue for govt through taxes in eight largest cities. (LiveMint)

GlaxoSmithKline intends to increase its holding in Indian subsidiary GlaxoSmithKline Pharmaceutical to up to 75% from 50.7% through an open offer in a deal worth $1.02B. GSK is proposing to pay 3,100 rupees ($49.895) a share. The Indian firm will remain listed. (SA) [stockquote]GLAXO[/stockquote]

Should you invest in art? Probably not. Although estimates of returns vary, one think everybody agrees on is that long-run real returns are less than investing in stocks. (WSJ)

Sunder’s List: Laying an Onion

Roundup: S&P -0.01%, Dow +0.10%, Nasdaq +0.06%, Gold $1234.60, London -0.08%, Germany -0.12%, France -0.23%. At pixel: Nikkei -0.54%, Hang Seng -0.49%

Farm-gate onion prices fell below Rs 10 per kg on Sunday. Price controls end up screwing the very people it tries to protect. (ET, Price Controls: 5 spectacular failures)

India has successfully exported its CAD to neighboring countries. Pakistan, Bangladesh, Myanmar, Nepal and Sri Lanka have alerted India that gold imported through them could be finding its way into the country through porous borders. All these countries, which have lower customs duties than the 10% imposed by India, have seen a surge in gold imports, which in turn has put pressure on their current account deficits. (ET, #gold) [stockquote]GOLDBEES[/stockquote]

Will the RBI adopt an inflation target? Will price stability becomes the RBI’s primary mandate? Major changes are afoot. (FT)

Indian banks are in a mess. Now is the time to enact far-reaching reforms. (LiveMint) [stockquote]BANKBEES[/stockquote] [stockquote]PSUBNKBEES[/stockquote]

All eyes will be on the U.S. central bank’s policy decision at 2 p.m. (19:00 GMT) on Wednesday (Dec-18). It is Bernanke’s last press conference as Fed chairman and he is expected to stress that interest rates will remain low for a long while irrespective of when QE is shelved. About half of the 60 economists polled by Reuters last week expected the Fed to wait until March before it trims the asset purchases. (Yahoo)

Good luck!

Sunder’s List: Stagflation

Roundup: S&P -0.38%, Dow -0.66%, Nasdaq -0.14%, Gold $1,226.90, London -0.96%, Germany -0.66%, France -0.43%. At pixel: Nikkei +0.41%, Hang Seng -0.25%

IIP -1.8%, CPI +11.24%. Monetary policy review next Wednesday. Rate hike a lock? (LiveMint, #rates)

All UB Group firms except except for UB Engineering Ltd have different majority shareholders. (LiveMint)

Cisco: U.S. market recovers, emerging markets “extremely challenged.” (Reuters)

David Rosenberg: U.S. economy in 2014 has more upside than many think. (FP)

Why it’s OK to sin a little and “market-time” – provided you do it in a contrarian fashion. (MorningStar)

Good luck and have a nice weekend!