On January 4, at a roundtable with former Fed bosses Janet Yellen and Ben Bernanke, Powell said he’s listening closely to the market’s fears of a slowdown, that he’ll change policy if there’s a slowdown and the changes in policy could include the timeline of shrinking the balance sheet. The markets whooped with joy. An upbeat TV analyst hit the nail on the head when he dubbed the rally as ‘Goldilocks with a capital J’ -- a reference to Jay Powell. That’s because Powell signalled that the Fed ‘put’, the policy of backstopping the markets initiated by former Fed Chairman Alan Greenspan, is alive and well. … [Read more...] about Opinion | Central banks’ ride to rescue the markets once again
We had Diwali last November, which always affects production, as stocks are bought in advance, businesses are closed and workers go home. The index of industrial production was up a huge 8.5 per cent in November 2017, so there's a big unfavourable base effect. Conversely, October 2018 IIP growth of 8.4 per cent was on top of 1.8 percent growth in October 2017. Diwali was in October in 2017. … [Read more...] about 100-Word Take | The 0.5% growth in IIP for November 2018 is not a sign of a slowdown
Q: Does it not make political sense for the RBI to cut interest rates?A: It doesn’t. Monetary policy operates with long lags and a 25 basis point rate cut at the RBI’s meeting on February 7 is unlikely to cut much ice before the elections. The government knows this, which is why it is concentrating on schemes that will give more bang for the buck, such as making banks give more loans to small businesses. … [Read more...] about Quick Take | 6 questions answered by inflation numbers
The leading indicators for September showed that among the major economies, it was only India that showed growth gaining momentum. Growth was stable in the US, China and Japan, while Russia and Germany showed signs of easing growth momentum. The other big economies such as the UK, France, Brazil showed easing growth. Overall, the balance was still tilted towards stable growth momentum. … [Read more...] about Opinion | Can Trump heroically bring the world economy back from the brink?
A. Yes, one has to be selective when making investment decisions on individual companies within a sector. Good companies at a reasonable value are desirable. Some of the perceived quality companies in the sector appear to be overvalued while those expected to make a comeback may be in the form of improved quality of management or writebacks on bad loans may be undervalued by the markets. … [Read more...] about Market is in longer duration time wise correction, says Ajay Khandelwal