Markets last week
The NIFTY was up 1.2%, marking seven weeks of gains in the last eight. This week, the run-up was in anticipation of better earnings in Q1 FY21. We also noticed trade data this month — India reported its first trade surplus in 18 years in June. However, this was caused by a 48% decrease in imports compared to last year. Exports were down only 12%, hinting at some demand pickup across other countries. The silver lining here is that both exports and imports have doubled since their March low.
Also, CPI Inflation was up 6.1% in June primarily driven by an increase in food prices, as expected.
Job cuts can have a second wave
Several reports in the US point to a second wave in job losses as companies will firm-up their cost-cutting strategies in the next few months
TCS reported that they will not have layoffs this year, and ensured offers for ~40,000 freshers as well — a little different to Cognizant from last week
FMCG sales have bounced back
FMCG consumption is only 2% down compared to pre-COVID levels: Nielsen
Housing sales are down by ~70–75% across metros, but prices are down only 1–5% thus far — scattered reports of online property searches picking up, but the higher end of the market still looks very weak
Downgrades continue
Real estate, autos, travel remain stressed sectors
MSME troubles
There is a call for a more co-ordinated and bigger stimulus package for MSMEs — currently, only MSMEs that meet a certain criteria are availing benefits
Vaccine data due this week
China seems to have weathered the storm as it reported a higher GDP this quarter — the rest of the world is still staring at a double-digit fall
Oxford will report initial data from their COVID vaccine trials on Monday
Allocation changes
We included Bharat Bond in the mix this week. We should roll it out later this week.
Do let us know if you have any queries or concerns.
