A Stock market crash can trigger a recessionSteepening cycles in the US yield curve have preceded stock market crashes in the past, and so far, this time is no different. As measured by the difference between the 10-year bond yield and the 2-year bond yield, the yield curve is now rising and made a higher high last night. The continued trend is toward a risk-off by investors out of equities into the safety of two-year or shorter-term bonds. Such stock market sell-offs have also resulted in a recession in the past so one follows the next.
Yieldcurve
India's 78th Independence Day Special - Economy Remains StrongJai Hind!
Its been 8 months into 2024, and in spite of all the global turbulence, Bharat, i.e. India, continues to remain a steady ship. This video reflects upon our history and learns from it to taking a peek into the future to be prepared for it.
Jai Hind!
Fed stays pat. Equities soar. India's Goldilocks periodIndia has managed to keep its public finance in control and focus on capex led growth. That has ensured that India managed to stay afloat during the storm and now that the storm has subsided, India is on its way to race at higher knots.
This video is an update on the latest global macro developments
Implications of small changes in US Bond Yields and USDINR As US Yields cool off a tad bit, it results into Dollar index cooling and Rupee strengthening. Our Forex Reserves increased, our yields fell and our benchmark equity indices soared. India's maiden 50 year bond issue was oversubscribed and that shows how much interest and confidence there is about India over the coming few decades.
India's largest Festival season - Diwali is on and that is adding to the positive mood and momentum.
Technicals also seem to be changing from sell to buy - but it is early days yet.
So the script works just fine in these conditions as in all other ones. If market makes a new low as compared to previous candle, it buys one unit, thereby effectively pulling the average cost down.
Indian and US G Sec Yields and impact on USDINR and EquitiesBond Yields in India are anchored at 7% whereas in US the curve is inverted and interest rates are going to be 'higher for longer'.
Inspite of this Rupee is not getting hammerred, due to huge forex reserves and even the Indian stock market is fairly resilient, thanks to deluge of local money.
So going forward, a long term investor is likely to benefit if he/ she keeps buying the dip and just stay invested.