sent to clients 15/5/23
Hello,
Top of the arvo to you and it’s a short and sweet one to stay ahead of a week with lots of noise. Here’s something to start you off and it’s the latest Theory of Thing podcast (formerly BIP Show)
We’re keeping the format tighter now so it’s just the facts and some chat on our views, which are right more often than not!
LINK HERE – we cover the traditional playbook of what happens once the Fed stops hiking. Also Heath goes over some great things on lithium.
I bang the drum on the trade into India and yes last week we did initiate the long on the Global X India ETF. The more I look at it the more I see it as being something that should have been in portfolios long ago and should stay for a long time to come. Chart looks good too.
A few notes for your perusal on India which continues to appear positively everywhere I look.
Eastspring Investments put out a lengthy report off the back of a survey they do of local business leaders. The key takeaway reinforces what I’ve been saying with regards the transfer from China to India as the market with the most upside.
I’ll put the easy part in front of you…
And here’s the link to the report. It’s very good.
Fascinating stat I loved to read is how much India’s tech talent continues to rally. The tech pool there is 3.8 million, behind China and the US on 4.4m and 4.4m respectively.
India has the need, the capability and the determination to shift very quickly into another tier of economic superpower, particularly in digital and renewable.
Further to this the FT is running at least one “wow that’s happening fast in India” style articles. Recently was one on the southern state of Karanataka, growing at 8% p.a. for the last decade and doubling average income through the last decade to 3800 USD.
That growth adds to money in wallets (digital or otherwise) which adds to the growth in Systematic Investment Plans regular savings plans investing in Indian managed Funds – like our superannuation system but optional) and that then adds to continued equity growth in Indian stocks.
It just makes too much sense…
The Fed
The other side of the coin is in the recent positioning of the Fed, with a slight rug pull in the Uni of Michigan Consumer Sentiment data coming in weaker than expected. It was extraordinary weak and adds fuel to the theory that the US consumer can just seize up at the drop of a very expensive hat (or car or mortgage payment).
If this continues then we go through the real earnings recession in the US, rates then drop and the end of 2023 really looks to the big tech players to carry them through to the end of the year, the same way they’ve made everything look relatively rosy so far this year.
There’s also been flows into the USD on global recession fears (it’s the left side of the USD ‘smile’) so unfortunately that means commodities will be affected. Anything you have that is hedged for currency might do well to open up to be exposed to the USD upside. Currency is a powerful thing.
The Weather
You know how much I love a weather chart but this had me stopped in my tracks.
Courtesy @ScottDuncanWX via twitter. That’s a 7 degree beat of previous May record and is 22 degrees warmer than average.
I’ll remind you that this is Northern Canada. Link here
Singapore just posted its highest temp in 40 years, Vietnam just had a 44.2.
El Nino here we are. Act accordingly.
All the best,
James
If you would like a free financial health check please click the link here and take the 5 minutes. It's always healthy to have a look and make a quick comparison.
James Whelan | Investment Manager
Ground Floor, 5-9 Harbourview Crescent, Milsons Point NSW 2061
T +1300 220 360 | f +612 8072 6271| m +61 407 958 036 | www.vfsgroup.com.au
Vertical Capital Markets, ABN 11 147 186 114 trading as VFS Group, is the holder of AFSL 418 418. A financial services guide is available from VFS Group website: www.vfsgroup.com.au and should be considered before deciding to deal in VFS Group equity and derivative products. Derivatives can be highly leveraged, carry a high level of risk and are not suitable for all investors. Investors should only invest in such products if they have experience in derivatives and understand the associated risks. VFS Group recommends that you seek appropriate advice.
This email and any files transmitted with it are confidential and intended solely for the use of the individual or entity to whom they are addressed. If you have received this email in error please notify the sender immediately. Please note that any views or opinions presented in this email are solely those of the author and do not necessarily represent those of the company. Finally, the recipient should check this email and any attachments for the presence of viruses. The company accepts no liability for any damage caused by any virus transmitted by this email.
Any personal information collected or disclosed as part of our communications, will be handled in accordance with the Privacy Act 1988 (Cth), as per our Privacy Policy. Our Privacy Policy is available for your perusal at www.vfsgroup.com.au, or alternatively please contact us directly with any queries.
Comments