Best Value For Your Money from RamaKrishnaVadlamudi

(please look at the blog dated 16Jan2023 for data from 2012 to 2022)

Quarter-to-date global market data, as on 31 March 2023, of stocks, bonds, currencies and commodities is as follows:

Table 1: (please click on the image to view better)

Between 31Dec2022 and 31Mar2023, global stock markets recovered. Nasdaq Composite led the way with a return of 16.8 percent for the first quarter of 2023. S&P 500 index rose by 7 percent, Dax 30 increased by 12.2 percent and Nikkei 225 delivered 7.5 percent.

Indian stocks disappointed with Sensex giving a negative return of 3 percent. It may be mentioned Sensex showed resilience in 2022 while most of the leading stock indices declined sharply. This calendar year, Sensex has been underperforming the global peers.

WTI crude declined by 6 percent, gold is up 8.6 percent and Bloomberg Commodity Index is down 6.5 percent in the first quarter of 2023.

The outlier is Bitcoin, which delivered a spectacular return of 72 percent in the quarter. (Bitcoin fell by 65 percent in 2022)

In recent months, inflationary expectations have been abating in major countries, including the US and the Euro area. In fact, inflation rates have declined in major developed markets. This has prompted markets to speculate about the US Federal Reserve reducing its federal funds rate in the second half of 2023.

The speculation about the Fed cutting rates has led to a rally in the US technology stocks and other markets too followed suit.

The US 10-year Treasury yield declined by 41 basis points in the quarter. The 2-year Treasury yield too fell sharply.

Year-on-year (past 12-month returns) global market data as on 31Mar2023 are presented below:

Table 2: (please click on the image to view better)

One-year returns (between 31Mar2022 and 31Mar2023) are as follows: Nasdaq declined by 14 percent, Dax 30 rose by 8.4 percent and Sensex was almost flat.

The US 10-year Treasury yield rose sharply by 237 basis points (100 basis points equal one percentage point) to 3.47 percent as on 31Mar2023. The 10-year India G-Sec yield increased by 88 basis points.

Crude oil, Bloomberg Commodity Index and Bitcoin have shown considerable decline in the past one year.

The US dollar index (USDX) increased by 4.3 percent.

The market speculation about the Fed easing its tight monetary policy has resulted in the recent rally for stocks. China lifting its COVID-19 restrictions too has sent positive signals to world growth prospects.

But as uncertainties around Russia's invasion of Ukraine, liquidity problems in the US and European banks, fears about de-globalisation and the US-China trade tensions continue to weigh on markets. Maybe, caution is the buzzword.

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Understanding Corporate Debt Market Development Fund (CDMDF)

A Brief Outline of Dixon Technologies (India) Ltd

General Market Chatter

Negative Impact of Debt Mutual Fund Tax Changes

Emami Limited Buyback Offer 2023

When Is The Next Buyback Offer Likely To Be?

Ajanta Pharma Buyback Offer 2023

Natco Pharma Buyback Offer 2023

When Will US Federal Reserve Stop Hiking Interest Rates?

Why Do Indian Equity Mutual Funds Always Disappoint Investors?

Adani Stocks Meltdown and Nifty Next 50 Index

Are Indian Stocks Immune to Adani stock Meltdown?

Meltdown in Adani group Listed Stocks

Indian Stock Market Moves Fully to T+1 Settlement

India Up the Ladder in MSCI EM Index

New Rules on Ex-date and Record date

Weblinks and Investing

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Disclosure: I've vested interested in Indian stocks and other investments. It's safe to assume I've interest in the financial instruments / products discussed, if any.

Disclaimer: The analysis and opinion provided here are only for information purposes and should not be construed as investment advice. Investors should consult their own financial advisers before making any investments. The author is a CFA Charterholder with a vested interest in financial markets.

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Saturday, 31 December 2022

Global Market Data 31Dec2022 - vrk100 - 31Dec2022

Global Market Data 31Dec2022

(please look at the blog dated 16Jan2023 for data from 2012 to 2022)

Quarter-to-date global market data, as on 30 December 2022, of stocks, bonds, currencies and commodities is as follows:

Table 1: (please click on the image to view better)

Between 30Sep2022 and 31Dec2022, global stock markets seems to have stabilised with Dow Jones, S&P 500, FTSE 100 and Hang Seng recovering significantly compared to the first nine months of calendar year 2022.

With Japanese Yen, Euro and Pound Sterling bouncing back spectacularly, versus the US dollar, the US dollar index lost 7.7 percent in the fourth quarter (Q4). Crypto currencies (crypto assets) continue their losing streak in Q4 with Bitcoin losing its price by up to 15 percent.

Silver gained massively in Q4 returning 27 percent whereas gold gained 9.7 percent. The US 10-year Treasury yield gained just 5 basis points (100 basis points equal one percentage point) in Q4 though it had fallen from its peak of 4.30 percent attained in the fourth week of October 2022.

Year-to-date (past 12-month returns) global market data as on 30Dec2022 are presented below:

Table 2: (please click on the image to view better)

The US stocks in calendar year 2022 have witnessed their worst yearly performance since the global financial crisis (GFC) in 2008. Nasdaq is the worst performing major index with a loss of 33 percent -- with bellwether stocks, like, Apple, Facebook, Tesla, Amazon and Google (Alphabet) losing heavily.

Sovereign bond yields of major countries have surged in 2022, giving bondholders their worst performance in several decades. The 10-year US Treasury yield gained 237 basis points in 2022, while India 10-year government bond yield gained 88 basis points in the same period.

One notable feature of 2022 is both the US stocks and bonds have shown pathetic performance in the same year, with the traditional 60-40 stocks-bond portfolio (60 percent stocks and 40 percent bonds) giving the worst performance in several decades.

Indian stocks have significantly outperformed their global peers with Sensex gaining 4.4 percent in 2022. Though pound sterling lost more than 10 percent of its value versus the US dollar in 2022 and the UK government bond prices facing tumultuous times, FTSE 100 index is stable in 2022 with a gain of one percent.

With Europe bearing the brunt of Russia's invasion of Ukraine and the concomitant energy crisis, DAX 30 index lost 12 percent in 2022.

Crypto currencies are the worst performing 'asset class' in 2022 with Bitcoin losing almost two-thirds of its value. The US dollar gained 9 percent and 11 percent against the Chinese Yuan and Indian rupee respectively in 2022.

Looking forward to 2023, one is hoping global markets may stabilise even as recessionary fears in the US and Europe have been increasing. But one should brace for heightened volatility in financial markets especially in the first half of 2023.

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P.S.: In Table 2 above, the change in US 10-year Treasury yield was wrongly mentioned as up 137 basis points, which was actually up 237 bp -- the same was corrected on 17Jan2023.

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BSE Broad and Sector Indices Returns 30Dec2022

Crisil Report - Big Shift in Financialisation

Global bond yields, negative real interest rates and soft landing

Indian Energy Exchange Buyback Offer 2022

Larsen & Toubro Infotech & Mindtree Merger Effective 14Nov2022

Indian Energy Exchange Limited - Brief Analysis

JP Morgan Guide to the Markets

Infosys Limited Buyback Offer 2022

Indians' Love For Cash Continues Unabated

Exit India Policy by Foreign Investors

Nifty 50 Index Quarterly Movement

Mutual Fund Asset Class Returns

Global Bond Yields and Asset Prices

Weblinks and Investing

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Disclosure: I've vested interested in Indian stocks and other investments. It's safe to assume I've interest in the financial instruments / products discussed, if any.

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Tuesday, 11 October 2022

Global Market Data 30Sep2022 - vrk100 - 11Oct2022

Global Market Data 30Sep2022

Quarter-to-date global market data, as on 30 September 2022, of stocks, bonds, currencies and commodities is as follows:

Table 1: (please click on the image to view better)

One notable feature of the financial markets in the past quarter has been the relentless rise of US dollar against the other major currencies. The Japanese Yen, the Euro and the British Pound have weakened considerably against the dollar, pushing the US dollar index or DXY by seven percent to 112 in the quarter.

Relatively speaking, Indian stocks outperformed other markets in the quarter, showing resilience amidst global weakness. Commodities, including crude oil, metals and agricultural commodities, have cooled off. And US 10-year Treasury yield shot up by more than 80 basis points to 3.83 percent.

Year-to-date (past nine-month returns) global market data as on 30Sep2022 are presented below:

Table 2: (please click on the image to view better)

YTD, Indian stocks have showed extraordinary resilience in the face of major global headwinds in the form of currency collapse, rising global bond yields, Russia's Ukraine invasion and others.

This year will be seen as the year of the mighty US dollar. Inexplicably, both bond and stock prices have collapsed this year, especially in the US and other Western markets. The US stocks appear to be in a bear market with indices losing more than 20 percent during this year. Bitcoin (in US dollars) has lost three-fifths of its price.

The uncertainty in the financial markets is likely to continue until the major central banks stop raising interest rates aggressively.

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JP Morgan Guide to the Markets

Indians' Love For Cash Continues Unabated

Exit India Policy by Foreign Investors

Nifty 50 Index Quarterly Movement

Mutual Fund Asset Class Returns

Global Bond Yields and Asset Prices

Slowest Growth in India's Real Per Capita Income

Why is India Falling Behind Bangladesh?

How Rates and Ratios are Moving

Slowing Foreign Direct Investment to India

What is Cooking Behind LT Foods' Share Price Rise?

A Rundown on Prince Pipes & Fittings

Primer on Credit Rating Scales

Weblinks and Investing

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Disclosure: I've vested interested in Indian stocks and other investments. It's safe to assume I've interest in the financial instruments / products discussed, if any.

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Friday, 1 July 2022

Global Market Data 30Jun2022 - vrk100 - 01Jul2022

Global Market Data 30Jun2022

Quarter-to-date global market data, as on 30 June 2022, of stocks, bonds, currencies and commodities is as follows:

Table 1: (please click on the image to view better)

As shown above, global stocks, especially US stocks, have sold off heavily in this quarter, amidst runaway inflation, growth scare and fears of a US recession. But there is one pocket that has proved to be contrary to the general trend.

That is the Chinese stocks, which managed to end on a positive return of 4.5 per cent for the quarter. India's large-cap stocks are relatively less damaged compared to the US stocks.

Crypto assets, like Bitcoin and Ethereum, have experienced a meltdown during the quarter. Bitcoin has lost 70 per cent of its value from its all-time-high (ATH). From its ATH of USD 68,998 on 10Nov2021, Bitcoin slumped to less than USD 20,000 during the period.

The US dollar continues its bull run against other major currencies, with the US dollar index or DXY gaining 6.6 per cent during the quarter.

Year-to-date (past six-month returns) global market data as on 30Jun2022 are presented below:

Table 2: (please click on the image to view better)

Yen Collapse

As Bank of Japan (BoJ), the Japanese central bank, tries to maintain yield curve control (YCC), the Japanese Yen has plunged by 18 per cent against the US dollar year-to-date. While central banks globally have been raising their benchmark interest rates, the BoJ has continued with its ultra-loose monetary policy while holding the 10-year JGB (Japanese Government Bond) yield below the level of 0.25 per cent.

This policy divergence between the BoJ and other centarl banks has created a storm for the Yen, with the Yen losing heavily versus other major currencies. The rising import bill (Japan imports a lot of its commodities, like, crude oil and others) is also causing the Yen to depreciate versus other major currencies.

Correlation Breakdown

As shown in Table 2 above, one peculiar aspect of financial markets during 2022 (year-to-date) is all financial assets have been sold off heavily, except, crude oil and some metals.

Year-to-date, the US 10-year Treasury yield surged by 150 basis points (or 1.5 percentage points) to more than 3 per cent. Rising bond yields lead to fall in bond prices. Bond yields move inversely to bond prices.

Correlations break down during times of financial crisis. This correlation breakdown has happened once again, with bonds, stocks, precious metals and cryptocurrency assets losing their values precipitously and simultaneously.

In normal times, financial assets like bonds and stocks move in oppose direction providing some downside protection to investors in hard times. Correlation of one or perfect correlation between two asset classes means asset prices tend to move in tandem. Correlation of zero means asset prices move in opposite direction--if one asset moves up, the other tends to move down.

As happened during the Lehman Brothers collapse of 2008, correlations among financial assets have broken down once again this year--meaning investors lost heavily in most of the asset classes.

Correlation breakdown seems to be a feature, rather than a bug, of the financial markets.

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Slowest Growth in India's Real Per Capita Income

Why is India Falling Behind Bangladesh?

How Rates and Ratios are Moving

Slowing Foreign Direct Investment to India

What is Cooking Behind LT Foods' Share Price Rise?

A Rundown on Prince Pipes & Fittings

Primer on Credit Rating Scales

When Will Foreign Investors Stop Selling Indian Stocks?

Indian Mutual Funds and The Art of Ripping Off Investors

Do Paint Stocks and Crude Oil Tango?

Weblinks and Investing

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Disclosure: I've vested interested in Indian stocks and other investments. It's safe to assume I've interest in the financial instruments / products discussed, if any.

CFA Charter credentials - CFA Member Profile

CFA Badge

He blogs at: