"There is no need to do
any housework at all. After the first four years the dirt doesn't get any
worse."
—Quentin Crisp (English,
1908-1999)
Word for the day
Abdominous (adj)
Having a large belly;
potbellied.
(Source: Dictionary.com)
Malice towards none
Akhand Bharat, as apolitical entity was created by whom and when? And it
stayed so Akhand for how long?
First random thought this morning
After South India, now cities in north England and South America
face unusual floods. Mother Nature is certainly happy with the way this world
is growing. We shall continue to face Mother's angst, if we do not mend our
ways ASAP. If past five years are a trend 2016 should see even worst of Mother
Nature.
I guess, Paris climate agreement needs to become a substantive
accord to please Mother Nature and not just remain a piece of diplomatic
hypocrisy.
Investment Strategy 2016 - 7: Market outlook
Unlike past couple of years, this year portending a clear market
outlook is much tougher. In December 2013 the greed was a dominating factor as
the market was well supported by rising global liquidity and ZIRP and pregnant
with hope of a new dawn. In December 2014 the fear was clearly overpowering
greed. Global weather was wet and windy as QE began to taper, China's slip
became conspicuous and indubitable leading commodity world to crumble; and in
domestic arena also skepticism began to grow as the things did not appear
working out as expected.
Today as we stand at the exit point of 2015, most fears have come
true. The markets, especially commodities, seem to have mostly adjusted to the
worst case scenario. Given this, normally the greed should be the dominating
factor. Looking at internals of the domestic market movement in past quarter or
so, it indeed appears to be so.
However, the global narrative continues to be worrisome. The
entire commodities' space looks rather hopeless. There is general consensus
that USD strength consequent to end of Fed's ZIRP regime and likely CNY
devaluation will add to deflationary pressure. The Eurozone yields and ECB and
BoJ stance also appears to be subscribing to this likelihood.
Seesawing between hope of recovery gathering some steam and
fear of a global meltdown, outlook for 2016 remains sketchy. In my view,
we will have intermittent phases of grey and sunshine during the year and
trading short term cycles will be the dominant theme.
The forces of Fear are likely to get fresh ammunition during 2016
with the disinflationary impact of stronger USD and higher Fed rates taking
roots, EU and Japan continue to flirt with recession, commodity universe
continuing to sink and the impact of fall in commodity prices begins to reflect
on global financial system.
Like before, many battles of this ongoing global war will be
fought in India too. Indian politicians continue to side with the Fearful,
providing them with enough ammunition and food to survive.
The forces of hope may get traction from the policy reset in India
becoming tangible. The investors’ sentiment at present is positive about the
cyclical recovery. Investor positioning and market internals are clearly
pointing towards that. The market implied volatility, volumes and breadth
continues to remain low. The volume concentration in top 25 traded stocks is
close to all time high.
I am not too excited about a conventional cyclical recovery in
2016. Cost efficiencies, productivity gains and ground breaking for some of the
prominent FDI projects in manufacturing area would create excitement in market.
Staple consumption could be supported by higher urban wages and normal rural
income (assuming a normal monsoon). Export demand may continue to remain
sluggish.
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