Yet another stimulus

Weekly update — 27 July 2020

Markets last week

Equity and gold were both up the previous week — NIFTY was up 2.7% while Nippon’s Gold ETF was up 4.8% (add another 3.2% on Monday as we write this). Positive news from Oxford trials keep hopes of a V-shaped recovery alive. Experts cite US-China tensions and a weak dollar for the gold run-up, but an ever-expanding global stimulus remains the core issue. Last week, EU leaders agreed on a $2 trillion recovery plan. As it stands right now, we have a total of $12 trillion of stimulus in three months — already three times that for the entire 2008–09 crisis.

Job cuts look likely

After layoffs across hospitality and travel, firms in other sectors such as Walgreens and Wells Fargo announced cuts last week

The next set of cuts will be a result of widespread business closures and subdued consumer demand, according to experts — these cuts will be aimed at white-collar jobs

MSMEs in the firing line

61% of MSMEs in India reported that they will not be able to service loans by September, according to a recent survey

NPAs across public sector banks are expected to jump to 15.2% by March 2021, from 11.3% in March 2020, according to the RBI

No change to discretionary spending

78% of respondents claim that they will reduce discretionary spending, according to a KPMG survey — however, Tier II and Tier III cities are more optimistic (than Tier I) of a potential revival

Allocation changes

We are sticking to weekly SIPs — no changes. Mindspace REIT IPO opened up today — we will share a note on this soon.

Also, we will share our take on Corona Kavach and Corona Rakshak policies later this week.

Do let us know if you have any queries or concerns.

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