Market run

Equity was up ~3–4% across NIFTY, NIFTY Midcap over the last six trading sessions — this marks a reversal after two weeks of negative returns, as all indices are now close to prior levels. It was a broad upswing in the market (on stimulus hopes) — even Nippon Gold BeES was up 1.3%.  A weaker dollar kept gold prices higher.

But, Trump called-off talks on new stimulus yesterday — the S&P 500 and Gold (priced in USD) were down ~1.5-2%. 

Some respite for IT jobs

US District Courts blocked Trump’s ban on H1B, L and other work visas, and passed an injunction against the recent visa fee hike — we could see short term positive effect on hiring, but IT firms will focus on hiring local US talent over the medium and long term

The US reported the smallest increase in jobs since the recovery in September — this points to a slow recovery as the US is still 10.7 million jobs short of its pre-pandemic level

Domestic unemployment rate fell to 6.67% in September from 8.35% last month — this is a cause for concern as labour participation rate fell to 40.7% from 41% last month

Amazon announced that it would create 100,000 seasonal jobs for the upcoming festive season —along with Delhivery and Ecom Express, this amounts to 145,000 new jobs

Royal Dutch Shell will cut 9,000 jobs or ~10% of its workforce as part of its transition plan

Consumer sentiment uptick to continue, slowly

Marico reported an increase in rural consumer sentiment driven by reverse migration of labour, as a part of its quarterly update

According to an InterMiles report, 60% of respondents expect to travel domestically in the next six months

Car sales increased by 33% in September, compared to last year, on strong dealer order books

According to a survey by Localcircles, 61% said that they would spend this festive season compared to 79% last year

Retail loan growth moderated in August, after a blockbuster July — vehicle, personal and home loans fell, while credit card loans remained flat

Business sentiment continues to improve

Services PMI jumped to 49.8 in September, while Manufacturing PMI rose to 56.7 — two big moves that highlight an increase in business confidence

Exports rose 5% in September, compared to last year — exports in drugs and pharmaceuticals increased by 24%

According to a CII survey of CEOs, only 31% expect their revenue to be in positive territory in the second half of 2020 — Together, they broadly reiterate on the ongoing slow recovery and estimate higher capacity utilisation going forward

The government plans to waive interest-on-interest for individuals and entities with loan amount less than 2-crore

Allocation changes

We continue to look for opportunities in gold, given its recent correction (weeks before last) — otherwise, no changes to allocations.