Global Markets

*Namaste!!!* 

*US Markets in Detail...*

Telegram @AlliesFin

*SGX: 17,578: +200: +1.15%* 

*IPO update* 

Ruchi Soya Industries Limited FPO..price (Rs 615-650).. (last heard: Rs. 25-28)

QIB: 2.33x, NII: 12.42x; RII: 0.95x; Total: 3.80x.

Krishna Defence (Price 37-39); Date: 25th -29th March. (last heard 9-11)

Verdana Learning Solutions Ltd. (last heard 12-14)

Issue Date: 29-31 March, Issue size 200 cr, Price Band: Rs. 130-137

Hariom Pipes…Issue date: 30th March to 5th April.

*IPL T20 update:*

Today…RCB vs KKR (T20 6/70)

Yesterday: RR (210/6) bt SRH (149/7) (T20 5 of 70)

*Provisional Cash Rs. In Crs. (29th Mar)*  

FIIs: +   35.47(7,360.87- 7,325.40)

DIIs: + 1,713.31(5,860.54- 4,147.23)

Please Note: Coronavirus spread has reduced drastically …so for some time will stop sending COVID update. Yet will anyone insist, and if it is majority, would’nt mind continuing…though personally would keep a track on the same on daily basis, and any major increase of cases, shall certainly update on the same.

Covid is yet up in European Nations, S.Korea, Australia, China, etc. Cases in US have come down drastically. 

Sensex: 57,944: +350: +0.61% 

Nifty: 17,297: +75: +0.44% 

Dow: 35,294: +338: +0.97%

S&P: 4,632: +56: +1.23% 

Nas: 14,620: +265: +1.84%

Brazil: 120,014: +1,276: +1.07%

Ftse: 7,537: +64: +0.86%

Dax: 14,820: +403: +2.80%

Cac: 6,792: +203: +3.08% 

MOEX: 2,408 (-22) (-0.91%)

WTI Oil: $104.24 (-1.62%)

Brnt: $111.49 (-0.88%) 

Gold: $1,918 (-27) (-1.37%)

Silver: $24.74 (-1.83%)

Copper: $473.10: +0.12%

Zinc: 4,088: +21: +0.52 %

Alluminum: 3,614: +9: +0.25%

Eur-$: 1.1088

GBP-$: 1.3097

Jpy-$: 122.89

Re: 75.9925 (-0.23%)

USD = RUB 88.0670: +0.73%

US10yr: 2.39%

GIND10YR: 6.821 (-0.22%)

$ Index: 98.4170 (-0.68%) 

Vix: 18.9 (-3.72%)

BalticDry: 2,484 (-60) (-2.36%)

*ADR/GDR*

Cogni: +1.30%

Infy: +1.58%

Wit: +1.52%

IciciBk: +1.83%

HdfcBk: +2.57%

DrRdy: +2.90%

TataMo: +2.14%

TatSt: +0.57%

Axis: +0.10%

SBI: +1.38%

RIGD: +1.97%

INDA: +1.75% (IShares MSCI INDIA ETF)

INDY: +1.98% (IShares MSCI INDIA 50 ETF)

EPI: +1.58% (Wisdom Tree India Earning)

PIN: +1.65% (Invesco India Etf)

*U.S. stocks rose in a broad-based rally on Tuesday (Dow books fourth straight day of gains) amid optimism for progress in talks between Russia and Ukraine. Most Treasury yields retreated, while a key segment of the curve inverted for the first time since 2019. The S&P 500 exited correction territory, buoyed by optimism over negotiations on a cease-fire in Ukraine and a decline in some commodity prices.*

Russia pledged to cut down on military operations around Kyiv and in northern Ukraine, while Ukraine proposed adopting a neutral status, the first sign of progress toward peace in weeks.

The S&P 500 gained for a fourth day, closing above the 4,600 level for the first time since mid-January. All 11 industry groups rose, except for energy stocks following declines in oil prices. The Nasdaq 100 climbed more than 1.5% and Apple Inc. rose for an 11th day in the longest winning streak since 2003. The dollar declined while the euro rose the most in almost three weeks. In after-hours trading, Micron Technology Inc. gained after the maker of memory chips forecast third-quarter adjusted revenue that beat estimates.

*Prices eased for oil and other commodities, helping calm concerns about rising inflation and the path of monetary policy by the Federal Reserve, which has started hiking interest rates to combat rising prices.*

If you look over the course of the month this war has been going on, the market has priced in much more bad news than good news. It certainly shows the market has a natural coiled spring that will be a reaction function to any good news and we saw a bit of that this morning, but everything will have to be taken with a grain of salt and we will have to see things actually play out versus being actually talked about.

*Still, there were signs of market nervousness that the Fed could make a policy mistake that leads to a slowdown, or possibly a recession, in the economy as the widely tracked U.S. 2-year/10-year Treasury inverted for the first time since September 2019.*

*"While I think the ultimate result of an aggressive Fed tightening cycle is a recession, I do not expect it to occur quickly. Historically speaking, all recessions are preceded by 2s10s inversions, but not all inversions result in recessions," said Ellis Phifer, managing director, fixed income research, at Raymond James in Memphis, Tennessee.*

On Monday, the Dow Jones Industrial Average DJIA rose 95 points, or 0.27%, to 34956, the S&P 500 SPX increased 32 points, or 0.71%, to 4576, and the Nasdaq Composite COMP gained 186 points, or 1.31%, to 14355.

*What drove markets?*

*Prospects for scaling back the war in Ukraine boosted risk sentiment. Talks between Russia and Ukraine failed to reach agreement on a cease-fire, but offered a potential pathway to a meeting between Vladimir Putin and Volodymyr Zelenskiy. Russia said it was cutting back military activity near the capital Kyiv and the city of Chernihiv, and its chief negotiator said Moscow would take steps to “de-escalate” the conflict.* 

Talk of a chance for a cease fire “is pumping more optimism into the market,” said Shep Perkins, chief investment officer for equities at Putnam Investments, in a phone interview Tuesday. 

The first face-to-face talks in two weeks between Russia and Ukraine were held in Turkey on Tuesday. Both sides described the negotiations as constructive, though no immediate breakthroughs were produced.

Russia’s military also said Tuesday it would “fundamentally” cut back operations near Ukraine’s capital and a northern city, potentially a significant concession by Moscow since it invaded its neighbor more than a month ago.

A sense of positivity returned to financial markets as the prospects of more cease-fire talks between Russia and Ukraine soothed investor jitters.

The dollar USDRUB plunged against the ruble, and oil prices CL dropped, as reports began to emerge after the day’s meetings in Istanbul, Turkey.

*To be sure, both sides have said in recent days they are not close to reaching a deal. Ahead of the negotiations in Turkey, Ukrainian Foreign Minister Dmytro Kuleba said on that “nothing is agreed upon unless everything is agreed upon.” Stocks gave back some of their gains on Tuesday after U.S. Secretary of State Antony Blinken said the U.S. was focused on Russia’s actions more than its words.*

*Traders kept a close eye on the bond market, where the yield for the 5-year Treasury note traded above the 30-year yield at times on Tuesday, an inversion that stoked some recession fears.*

*The selloff in Treasuries stalled, with yields lower across most maturities as talks drove down oil prices and inflation expectations. The five-year breakeven rate on inflation protected Treasuries dropped as much as 12 basis points to 3.52% after hitting record highs last week. Meanwhile, the two-year yield briefly exceeded the 10-year for the first time since 2019, reinforcing the view that Federal Reserve rate increases may cause a recession.*

*The spread between the 2-year and 10-year yields, which economists see as more predictive of a potential recession, also narrowed perilously close to inversion on Tuesday. Some bond pricing sources said the curve did invert, but CNBC data showed that traded just about flat but did not technically invert.*

*Even when the yield curve correctly predicts a recession, it can still be more than year before the slowdown happens, history shows. Investors appeared to shake off the recession fears on Tuesday.*

*“Our base case is that the US economy can avoid a recession, lowering the threat of a sustained downtrend in stocks. As such, investors should brace for higher rates—including potentially adding exposure to value and financial stocks which tend to outperform as central bank policy tightens—without overreacting by exiting equity markets,” Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a note to clients.*

Global shares have rallied from the lows reached after Russia invaded Ukraine. Such resilience contrasts with inverting yield curves, which are shaking economic confidence as investors brace for the Fed to tighten monetary policy to contain inflation running at the fastest pace in four decades. The two- to 10-year inversion is the latest in a series beginning in October, when 20-year yields topped 30-year yields. In the past month, inversion has come to the 7- to 10-year and the 5- to 7-year segments, among others.

Although oil prices remain elevated, their decline from even higher levels has taken “a little of the pressure off inflation,” said Putnam’s Perkins. West Texas Intermediate Crude for May delivery CLK22 declined 1.6% Tuesday to settle at $104.24 a barrel, the lowest finish for a front-month contract since March 17, according to FactSet data.

Meanwhile, wheat futures W00 dropped Tuesday as traders reacted to news of potential progress in negotiations between Ukraine and Russia. Both countries are significant suppliers of wheat.

*The equity market is responding to “improvement” in some commodity prices that had been “extremely extended. Commodity prices have fallen on optimism surrounding potential progress in talks to end the Russia-Ukraine war, as well as a slowdown in China as it continues its “zero-Covid policy” with shutdowns.*

*The situation in Ukraine and the situation in China are coming together to moderate commodity prices,. Widespread shutdowns in China weigh on consumption in the country while slowing its utilization of commodities.*

A two-phased lockdown of the financial capital Shanghai entered the second day, raising the prospect of more supply chain disruptions hitting the world economy.

*But even with the recent surge in inflation….In U.S. economic data, the Conference Board’s index of consumer confidence rose to 107.2 in March and increased for the first time in 2022, even as Americans remain uneasy about high inflation and the economic fallout from the war in Ukraine. Economists polled by The Wall Street Journal had forecast the index to rise to 107.5.*

Employment trends could be partly behind the improved sentiment, according to Perkins. “The labor market is very strong,” he said. “We know that people are changing jobs, presumably to get raises.” Data on job openings and labor turnover showed the quitting rate rose to 2.9% in February, from 2.8% in January, according to the U.S. Department of Labor.

*In other economic data released Tuesday, the S&P CoreLogic Case-Shiller 20-city house price index posted a 19.1% year-over-year gain in January, up slightly from 18.6% the previous month.*

An uptick in 30-year mortgage rates should help cool the hot housing market, according to Perkins. He said some slowing in home-price growth would be “well received” by the equity market as it would take some pressure off “the inflation picture” broadly worrying investors.

*Government data Friday are expected to show the economy probably added close to a half million jobs in March as the unemployment rate fell to 3.7%.*

As the Fed embarks on what appears likely to be an extended rate hike cycle and financial conditions tighten, consumers are increasingly wary of the outlook for the economy in the latter half of the year and into 2023.

*Philadelphia Fed Bank President Patrick Harker said he expects a series of “deliberate, methodical” rate increases this year, but said he is open to a half-point move in May if near-term data shows more inflation.*

“Can policy makers thread the needle to cool the economy and bring inflation pressures down to a more palatable level without choking off growth? That’s the challenge before the Fed and a tall order for policy makers who will attempt to navigate the economy to a soft landing,” he wrote.

Wilmington moved to a “neutral” weighting for equities across developed markets at end of last week, from a previously “overweight” position, according to Roth.

“In our view, the markets are not taking into account the risks around inflation sufficiently, and the risks that are associated with much tighter monetary policy,” he said. “Even though we don’t see a recession this year, we do see a good chance of recession next year—and that’s not priced into the market yet.”

*More commentary*

“What we haven’t really started to get our hands around and what we haven’t had to deal with yet is quantitative tightening,” Scott Ladner, chief investment officer at Horizon Investments, said by phone. “And so we’re probably about halfway through the Fed story for this tightening cycle. But the second half is frankly a lot more uncertain than the first half.”

“When you have a situation where oil prices have spiked and oil becomes a larger component of GDP, historically that has lead to a recession,” said Joe Gilbert, portfolio manager at Integrity Asset Management, in an interview with Bloomberg TV. “But we’re in a lot stronger position from the way consumers are, the job market-the health there. So our base case is that we avoid recession, but we will have periods of slower growth.”

“We are seeing small changes in the facts, primarily some favorable negotiations between Russia and Ukraine,” said Mike Bailey, director of research at FBB Capital Partners. “Investors are extrapolating this small positive into perhaps a bigger positive that a cease-fire is around the corner. Finally, investor opinions are getting more bullish by the day as buyers see improving fundamentals and stocks trading below peak, especially for tech.”

*Volume on U.S. exchanges was 13.22 billion shares, compared with the 14 billion average for the full session over the last 20 trading days.*

*Which companies were in focus?*

• *FedEx Corp.* founder Fred Smith late Monday announced plans to step down from the chief executive role, and will be replaced by the logistics company’s president and chief operating officer. FedEx shares rose 3.7%.

• *Moderna* rose 4.4% after U.S. regulators approved an additional Covid vaccine booster shot for people age 50 and over.

• Shares of *Robinhood Markets Inc.* jumped 24.2% after the trading app said it would extend the hours that its customers could trade and was working toward 24/7 trading.

• Shares of popular meme stock *GameStop Corp.* fell 5.1%, snapping a record-matching 10-day winning streak.

• *UnitedHealth Group Inc.’s* Optum Health confirmed it would buy post-acute healthcare services company LHC Group LHCG in a deal that values LHC Group at more than $5.5 billion. LHC Group shares climbed 5.9%, while shares of UnitedHealth edged down 0.5%.

• Shares of Dave & Buster’s Entertainment Inc. jumped 14.9% after the games-themed restaurant chain’s quarterly results released late Monday fell below Wall Street expectations.

• *Nielsen Holdings PLC* shares surged 20.3%, after the audience measurement company confirmed a deal to be acquired by a private equity consortium in a cash deal valued at about $16 billion, including debt.

• *NeoGenomics Inc.* Chief Executive Mark Mallon stepped down Monday as the health-testing company revealed that first-quarter financials will miss guidance and rescinded its forecast for the full year. Shares plunged 29.8%.

In Asia, the Shanghai Composite fell 0.3%, while the Hang Seng Index in Hong Kong and Japan’s Nikkei 225 JP:NIK each rose 1.1%.

*Some key events to watch this week:* 

# U.S. GDP, Wednesday 

# Richmond Fed President Thomas Barkin to speak, Wednesday 

# China manufacturing, non-manufacturing PMIs, Thursday OPEC and non-OPEC ministerial meeting to discuss production targets, Thursday 

# New York Fed President John Williams to speak, Thursday 

# U.S. jobs report, Friday

*Currencies* 

# The Bloomberg Dollar Spot Index fell 0.6% 

# The euro rose 0.9% to $1.1088 

# The British pound was little changed at $1.3097 

# The Japanese yen rose 0.8% to 122.87 per dollar 

*Bonds* 

# The yield on 10-year Treasuries declined seven basis points to 2.39% 

# Germany’s 10-year yield advanced five basis points to 0.63% 

# Britain’s 10-year yield advanced two basis points to 1.64% 

*Commodities* 

West Texas Intermediate crude fell 0.9% to $105.02 a barrel 

Gold futures fell 1% to $1,925.40 an ounce.

Https://t.me/AlliesFin