Global Markets Pause On Strong US Jobs Numbers And High Bond Yields
Global equities fell the most since October on speculation the Federal Reserve was in no rush to reduce interest rates. Further catalysts may come from the US inflation print due Thursday and the earnings season kicking off Friday
Our Top Reports For Today
- (00:00) Stories Of The Day
- (01:19) Global markets pause on strong US jobs numbers and high bond yields.
- (02:57) Saudi Arabia unexpectedly cuts oil prices as demand weakens.
- (04:04) India’s exports may drop close to 7% on Red Sea blockages.
- (04:58) India’s Auto sales hold momentum, 2 wheelers sales strong despite slowdown in agricultural growth.
- (11:47) Has Boeing compromised safety in it’s 737 model? A pilot’s view
- (21:37) DLF sells over 1,000 flats for 7,000 crore or over Rs 7 crore each in a single location over 3 days.
- (23:07) 38-year-olds help Mercedes clock record car sales for 2023.
NOTE: This transcript contains only the host's monologue and does not include any interviews or discussions that might be within the podcast. Please refer to the episode audio if you wish to quote the people interviewed. Email [email protected] for any queries.
---
Markets Down, Saudi Cuts Oil Prices
Equity markets declined Monday amid weakness in global indices.
Global equities fell the most since October on speculation the Federal Reserve was in no rush to reduce interest rates. Further catalysts may come from the US inflation print due Thursday and the earnings season kicking off Friday with US financial names including JPMorgan Chase & Co and Citigroup Inc, Bloomberg said.
The BSE Sensex fell 671 points to settle at 71,355 while The Nifty50 ended at 21,513, down 198 points.
The triggers once again seem to be flowing from Wall Street and in that general vicinity.
The US jobs market is reporting strong numbers including on average hourly bearings thanks to which the yield on 10-year bonds in the United States has gone up thanks to which the probability of a rate cut in March this year has come down according to the CME Fed watch tool.
All of which means capital is less likely to seek distant investment avenues, which of course include markets like India. All this is relative and of course no one is predicting any major outbound flows.
The overall structural fundamentals for the Indian markets and economy are exactly where they were, last week when we were generally celebrating 22,000 on the Nifty and 72,000 on the Sensex.
Saudi Cuts Oil Price
And now our IndiaEnergyWeek energy segment.
The unexpected has happened.
Saudi Arabia has cut official selling prices of crude by a more than expected $2 a barrel, highlighting weak demand conditions which outweighed the Red Sea tensions and supply disruptions in Libya.
Its pricing is the lowest since November 2021, Bloomberg reported.
Global benchmark Brent fell below $78 a barrel, after rising 2.2% last week and was quoting a shade over $76 a barrel overnight.
Moreover, oil speculators have now turned bearish, ramping up short positions against both Brent and WTI, Bloomberg said.
Vandana Hari, Singapore based oil analyst and founder of Vanda Insights told Reuters that the Red Sea tensions are the only counterweight, albeit a relatively weak and intermittent one, to crude prices succumbing to bearishness over expectations of softening global demand and rising inventories"
Meanwhile, India may see around $30 billion shaved off its total exports in the current fiscal year, as threats to cargo vessels in the Red Sea lead to a surge in container shipping rates and prompt exporters to hold back on shipments, Bloomberg is reporting quoting insights from the Research and Information System for Developing Countries, a New Delhi-based think tank.
The Indian government hasn’t released any official estimates on the impact of the Red Sea crisis on Indian exports.
The number of ships passing through the Suez Canal is down about 44% compared to the average for the first half of December, according to Clarkson Research Services Ltd, a unit of the world’s largest ship broker.
The energy segment was supported by IndiaEnergyWeek to be held from February 6. Details at www.indiaenergyweek.com
---
Auto sales are still going strong, holding the momentum they picked up during the 2023 festival season that started around the Navratri festival in October.
Retail auto sales in India jumped 21 per cent in December 2023, according to the data released by the Federation of Automobile Dealers Associations (Fada) on Monday.
For all of 2023, retail sales were up 11 per cent to 23,867,990 units against 21,492,324 units in 2022.
Sales in December 2023 were 30.25 per cent lower than 2,854,242 units in November.
All categories of vehicles did well, two-wheelers rose 28 per cent, three-wheelers by 36 per cent and passenger vehicles (PVs) by 3 per cent.
While overall agricultural growth numbers have been weak, thanks also to a weak monsoon, the money in the hands of farmers seems to have grown, at least as seen in 2-wheeler sales numbers. Will come to that shortly.
In 2023, too, all segments reported a positive growth. The two-wheeler sales grew by 9.5 per cent, three-wheelers by 58.5 per cent, PVs by 11 per cent, Tractors by 7 per cent and CVs by 8 per cent.
I spoke with Manish Manish Raj Singhania, president at Fada, based out of Raipur in Chattisgarh and began by asking him what was keeping the momentum strong and whether this December was unusual in any way ?
BOEING FACES MORE SAFETY QUESTIONS
Officials have recovered a panel that blew off an Alaska Airlines airliner triggering a partial grounding of Boeing's 737 MAX 9 aircraft, Reuters is reporting.
A door plug tore off last week after takeoff from Portland, Oregon, en route to Ontario, California, depressurizing the plane and forcing pilots to turn back from around 16,000 feet.
The plane, with 171 passengers and six crew on board, landed safely.
The U.S. Federal Aviation Administration (FAA) on Saturday ordered the temporary grounding of 171 Boeing MAX 9 jets installed with the same panel, which weighs about 60 pounds (27 kg) and covers an optional exit door.
Interestingly, the 737’s cockpit voice recorder did not capture any data because it had been overwritten because it captures only 2 hours of data as per current mandates.
Boeing's shares fell as much as 8% in pre-market U.S. trade on Monday.
Five years ago, all MAX-family jets worldwide were grounded following two fatal crashes.
About 215 737 MAX 9 jets are in service worldwide, according to aviation analytics firm Cirium. Only about 171 feature the plug door that was blown out during the flight, said Reuters.
I reached out to pilot and aviation safety advocate Captain Amit Singh and began by asking him how he was viewing the Alaska Air incident.
---
Pilot safety has been in the spotlight in India after an unusually high number of deaths of pilots across Indian airlines apparently because of fatigue-triggered cardiac conditions and a general increase in reported fatigue.
The Directorate General of Civil Aviation on Monday introduced new flight duty regulations under which weekly rest hours for pilots have been increased from 36 hours per week to 48 hours.
The DGCA has also reduced the maximum flight time for pilots to fly at night in a day to eight hours and cut down maximum landings by a pilot in a day to two.
“After in-depth analysis of pilot rosters, fatigue-related reports and direct feedback from pilots, we have introduced revised “FDTL Regulations” that include increased rest periods, redefining night duty, and regular fatigue reports to be shared by airlines,” India’s civil aviation minister said.
The new FDTL norms have been shared with airlines and they will be required to comply with the revised norms by June 1, the DGCA said.
The DGCA has also changed the definition of night and it now covers the period of 0000-0600 hours in the revised regulations vis-a-vis the period of 0000-0500 hours under the previous regulations.
Also, the revised regulations have taken into consideration different types of operations across time zones, the statement said, adding that the maximum flight time and maximum flight duty period for flight operations encroaching night have been restricted to eight hours' flight time and 10 hours flight duty period, respectively.
DLF Sells Record No of Flats Again
Here on, instead of saying something is selling like hot cakes I will say something is selling like flats in Gurgaon.
Real estate major DLF announced it had sold 1,113 luxury apartments in Gurugram, adjoining Delhi for Rs 7,200 crore within three days of pre-launch.
The flats were sold in its newest luxury residential development, DLF Privana .
This is not the first time DLF has sold out flats in this manner.
Last March, it sold 1,137 luxury apartments, costing Rs 7 crore and more in another housing project in Gurgaon for over Rs 8,000 crore in three days.
DLF has now launched a new project 'DLF Privana South' which is spread over 25 acres in Sectors 76 and 77, Gurugram.
There have been a few other reported cases of rapidly selling out real estate projects including in the south.
The DLF numbers are of course in sync with what the overall real estate sales numbers are telling us, strong numbers in both value and volume of sales across the country.
The Delhi-NCR-Gurgaon market of course has seen a resurgence of a kind which many may not have anticipated.
Mercedes Record Sales
Speaking of record sales, Mercedes Benz will launch some 12 new models this year which have done well thanks to young, affluent Indians, officials said on Monday.
Mercedes said nearly 25% of its sales came from vehicles costing over Rs 1 crore and it sold 3,500 of them last year and has a backlog of over 6,000 cars, Moneycontrol website reported.
"There is an evolving customer profile, the demographics are changing today. There is a lot of aspiration from the young achievers to straight away get into the top end segment of luxury," a Mercedes official told Reuters.
Mercedes buyers in India have an average age of 38, are typically business owners but the number of purchasers who are salaried professionals have climbed steadily to account for 12% to 14% of buyers, the German auto major said.
India’s "mini metro" cities are "future growth engines' ' and the company plans to open new service workshops in some of these places such as Udaipur, Amritsar and Agra, according to Mercedes officials.
