Markets last week
The NIFTY was up by 2.2% last week (and as we write this, it is up 1.4% today). We are now only 14% lower than the levels before the crisis. There are green shoots, but along with other indicators, they point to an elongated recovery (much unlike the NIFTY). A 1-year FD delivers 5.1% compared to 6.1% in January; there is a broad movement towards equity in search for returns.
There were a lot of negative indicators last week.
Layoffs in tech jobs
Cognizant points to potential layoffs across other IT majors
Startup funding is down — delayed deals are commonplace
Demand fall-off
Real estate prices are finally reacting to lower demand with a drop in prices
Car sales are down ~48% in June, compared to last year
Debt downgrades
The NBFC downgrade list grows longer — PNB Housing Finance is the newest member
COVID concerns remain
Mixed bag abroad — while Europe opens for travel, the US is recording ~48,000 cases every day
The best scenario for a vaccine seems at least six months away
Allocation changes
There are no changes from last week. Apart from indices for equity, we are sticking to overnight funds and GILT funds for debt (given potential downgrades).
We’ve launched weekly SIPs in your accounts. We should firm up our US allocations by early August.
Do let us know if you have any questions or concerns.
