Pankaj Sharma

At the end of CY 2022, there was nearly a consensus among economists and institutional investors that the US economy was going to hit a recession in CY 2023. We were not anticipating a recession at the time since the US economy had strong underpinnings in the form of strong consumer demand, particularly in the travel and leisure sector. This report will explain various factors that have actually led to strong economic growth in the US in CY 2023.

Retail investors have emerged as a formidable force in India’s equity markets, driven primarily by the rapid growth of mutual fund investments, especially through Systematic Investment Plans (SIPs). However, this wave of domestic retail inflows is inadvertently creating exit opportunities for "smart money" investors—such as promoters, private equity funds, and multinational corporations (MNCs).

Recent data on US consumer’s health points to a troubling financial trend among American consumers. The delinquency rate on consumer loans has been sharply increasing. The consumers, particularly the bottom 50%, are extremely overstretched and over-leveraged, hampering their ability to service their loans.

Germany has been a very unique story over the last few years where their GDP and Industrial production has been in negative territory for many quarters and yet their stock market is making new all-time highs on a regular basis. The charts below point out how the two have diverged.

We see a very interesting opportunity on a rare pair of JPY/XAU. Here, JPY is taken as 1 Lakh yen while XAU is the spot price of gold. This pair has been hitting new 15-year lows practically on a daily basis. As of now the ratio is at 0.2704. As recently as August 2018, this was trading at 0.763. This pair has been moving down for many years but the move in recent 2 months was particularly sharp and we believe…

We believe that large parts of the world are currently exhibiting symptoms similar to Japan's challenges in the late 1980s. These include declining or stagnating total and working-age populations, an economy burdened by debt, and bubbles in both the equity and real estate markets.

The Indian economy is currently on a slower growth trajectory than initially expected for CY 2024. Both the Reserve Bank of India (RBI) and several global financial institutions have lowered their growth forecasts for the country. The health of the banking sector is a critical indicator of the broader economy, reflecting the intricate interplay between economic growth, bank credit growth, deposit growth, and interest rate spreads.

The Federal Reserve is expected to kick off a series of rate cuts on Wednesday, after having completed last year the most aggressive rate hike campaign in four decades. For investors, a key question may be whether the Fed will cut rates in time to avert a potential economic slowdown.

The outlook is extremely positive right now and we believe it represents one of the best long term investment opportunities. There are enough macro indicators which support the case for investment into gold and we have pointed out many such factors in our previous macro insights and outlook reports. However, this macro insight is dedicated to the technical aspects of gold as an asset class.