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Ahead of the Curve provides analysis and insight into today's global financial markets. The latest news and views from global stock, bond, commodity, and FOREX markets are discussed. Rajveer Rawlin is a PhD and received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher, having followed capital markets in the US and India since 1993. His research interests include capital markets, banking, investment analysis, and portfolio management, and he has over 20 years of experience in the above areas, covering the US and Indian markets. He has several publications in the above areas. He currently teaches business and management students at CHRIST University. The views expressed here are his own and should not be construed as advice to buy or sell securities.

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Showing posts with label stock market outlook. Show all posts
Showing posts with label stock market outlook. Show all posts

Monday, 16 June 2025

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning June 16

 

Asset Class

Weekly Level / Change

Implications for S&P 500

Implications for Nifty*

S&P 500

5977, -0.39%

Neutral

Neutral

Nifty

24719, -1.14%

Neutral **

Bearish

China Shanghai Index

3377, -0.25%

Neutral

Neutral

Gold

3453, 3.42%

Bullish

Bullish

WTIC Crude

71.29, 10.30%

Bullish

Bullish

Copper

4.82, -0.62%

Bearish

Bearish

CRB Index

310, 2.99%

Bullish

Bullish

Baltic Dry Index

1968, 20.51%

Bullish

Bullish

Euro

1.1553, 1.28%

Bullish

Bullish

Dollar/Yen

144.10, -0.41%

Neutral

Neutral

Dow Transports

14686, -1.29%

Bearish

Neutral

Corporate Bonds (ETF)

107.79, 0.81%

Bullish

Bullish

High-Yield Bonds (ETF)

95.70, 0.08%

Neutral

Neutral

US 10-year Bond Yield

4.41%, -2.19%

Bullish

Bullish

NYSE Summation Index

626, 14%

Bullish

Neutral

US Vix

20.82, 24.15%

Bearish

Neutral

S&P 500 Skew

150

Bearish

Neutral

CNN Fear & Greed Index

Greed

Bearish

Neutral

Nifty MMI Index

Greed

Neutral

Bearish

20 DMA, S&P 500

5945, Above

Bullish

Neutral

50 DMA, S&P 500

5668, Above

Bullish

Neutral

200 DMA, S&P 500

5807, Above

Bullish

Neutral

20 DMA, Nifty

24833, Below

Neutral

Bearish

50 DMA, Nifty

24278, Above

Neutral

Bullish

200 DMA, Nifty

24092, Above

Neutral

Bullish

S&P 500 P/E

28.52

Bearish

Neutral

Nifty P/E

22.22

Neutral

Bearish

India Vix

15.08, 3.08%

Neutral

Bearish

Dollar/Rupee

86.11, 0.38%

Neutral

Neutral

 

 

Overall

 

 

S&P 500

 

 

Nifty

 

Bullish Indications

11

9

Bearish Indications

6

6

 

Outlook

Bullish

Bullish

Observation

 

The S&P and the Nifty fell last week. Indicators are bullish for the week.

Markets are topping again. Watch those stops.

On the Horizon

UK – CPI, BOE rate decision, Eurozone -CPI, US – FOMC rate decision, Japan – BOJ rate decision

*Nifty

 

India’s Benchmark Stock Market Index

Raw Data

Data courtesy stockcharts.com, investing.com, multpl.com, nseindia.com, tickertape.in

**Neutral

Changes less than 0.5% are considered neutral

 


The S&P and the Nifty fell last week. Indicators are bullish for the week. Markets are topping. We are transitioning into a deflationary regime. The sentiment is greedy. Carry trade liquidation is about to resume, and the S&P will likely find resistance near prior highs. The macro-environment was rapidly deteriorating even before the recent tariff issue. The recent massive breakdown in transports (recent rebound is quite shallow) is quite ominous. This, combined with oil's free fall (despite the recent rebound), has profound recessionary implications. The Nifty has corrected significantly from recent highs and will likely end its outperformance soon.

The past week saw US equity markets fall. Most emerging markets were unchanged even as interest fell. Transports fell. The Baltic dry index rose significantly. The dollar fell. Commodities rose. Valuations are expensive, market breadth fell, and the sentiment is greedy. Volatility (S&P 500) caught a bid.

A currency crisis should resume at any moment and push risky assets to new lows. Deflation is in the air, and bonds are telegraphing just that despite intermittent spikes in yields. It feels like a 2008-style recession trade has begun, with a potential for a decline in risk assets across the board. The current market is tracking closely the 2000 moves down in the S&P 500, implying a panic low right ahead in the upcoming months (My views do not matter; kindly pay attention to the levels). A dollar rally is a likely catalyst.

The S&P 500 is correcting from recent highs. We have bounced from recent lows without capitulation. This suggests the lows may not be in, and the regime has changed from buying the dip to selling the rip. We may get a final flush down soon. Risky assets should continue breaking to the downside as earnings growth falters. The Fed has aggressively tightened into a recession. Deflationary busts often begin after major inflationary scares. The Dollar, commodities, and bond yields are flashing significant warning signs.

Global yield curves have inverted a second time after the recent steepening, reflecting the arrival of a significant economic slowdownFollowing the recent steepening of the yield curve after the first inversion, this second inversion is complete, and currently, steepening, which is a precursor to the next recession, and the riskiest assets will underperform going forward under such conditions. 

The critical levels to watch for the week are 5990 (up) and 5965 (down) on the S&P 500 and 24800 (up) and 24650 (down) on the Nifty. A significant breach of the above levels could trigger the next big move in the above markets.  High beta / P/E will get torched again and is a sell on every rise. Gold increasingly looks like the asset class to own over the next decade (currently correcting). Gold exploded almost eight times higher over the decade following the dot-com bust in 2000. Imagine what would happen to gold as this AI bubble bursts. You can check out last week’s report for a comparison. I love your thoughts and feedback.

 

 

Monday, 9 June 2025

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning June 09

 

Asset Class

Weekly Level / Change

Implications for S&P 500

Implications for Nifty*

S&P 500

6000, 1.50%

Bullish

Bullish

Nifty

25003, 1.02%

Neutral **

Bullish

China Shanghai Index

3385, 1.13%

Bullish

Bullish

Gold

3347, 0.39%

Neutral

Neutral

WTIC Crude

64.58, 4.13%

Bullish

Bullish

Copper

4.85, 1.55%

Bullish

Bullish

CRB Index

301, 3.60%

Bullish

Bullish

Baltic Dry Index

1633, 15.16%

Bullish

Bullish

Euro

1.1395, 0.37%

Neutral

Neutral

Dollar/Yen

144.87, 0.74%

Bullish

Bullish

Dow Transports

14877, 1.30%

Bullish

Neutral

Corporate Bonds (ETF)

106.92, -0.79%

Bearish

Bearish

High-Yield Bonds (ETF)

95.62, -0.30%

Neutral

Neutral

US 10-year Bond Yield

4.51%, 2.45%

Bearish

Bearish

NYSE Summation Index

550, -2%

Bearish

Neutral

US Vix

16.77, -9.69%

Bullish

Neutral

S&P 500 Skew

139

Neutral

Neutral

CNN Fear & Greed Index

Greed

Bearish

Neutral

Nifty MMI Index

Greed

Neutral

Bearish

20 DMA, S&P 500

5900, Above

Bullish

Neutral

50 DMA, S&P 500

5630, Above

Bullish

Neutral

200 DMA, S&P 500

5796, Above

Bullish

Neutral

20 DMA, Nifty

24797, Above

Neutral

Bullish

50 DMA, Nifty

24137, Above

Neutral

Bullish

200 DMA, Nifty

24081, Above

Neutral

Bullish

S&P 500 P/E

28.63

Bearish

Neutral

Nifty P/E

22.47

Neutral

Bearish

India Vix

14.63, -9.00%

Neutral

Bullish

Dollar/Rupee

85.79, 0.31%

Neutral

Neutral

 

 

Overall

 

 

S&P 500

 

 

Nifty

 

Bullish Indications

12

12

Bearish Indications

5

4

 

Outlook

Bullish

Bullish

Observation

 

The S&P  and the Nifty rose last week. Indicators are bullish for the week.

Markets are topping again. Watch those stops.

On the Horizon

UK – GDP, US – CPI, PPI, Japan – GDP

*Nifty

 

India’s Benchmark Stock Market Index

Raw Data

Data courtesy stockcharts.com, investing.com, multpl.com, nseindia.com, tickertape.in

**Neutral

Changes less than 0.5% are considered neutral

 


The S&P and the Nifty rose last week. Indicators are bullish for the week. Markets are topping. We are transitioning into a deflationary regime. The sentiment is greedy. Carry trade liquidation is about to resume, and the S&P will likely find resistance near prior highs. The macro-environment was rapidly deteriorating even before the recent tariff issue. The recent massive breakdown in transports (recent rebound is quite shallow) is quite ominous. This, combined with oil's free fall (despite the recent rebound), has profound recessionary implications. The Nifty has corrected significantly from recent highs and will likely end its outperformance soon.

The past week saw US equity markets rise. Most emerging markets rose even as interest rates rose. Transports rose. The Baltic dry index rose. The dollar was unchanged. Commodities rose. Valuations are expensive, market breadth fell, and the sentiment is greedy. Volatility (S&P 500) fell.

A currency crisis should resume any moment and push risky assets to new lows. Deflation is in the air, and bonds are telegraphing just that despite intermittent spikes in yields. It feels like a 2008-style recession trade has begun, with a potential for a decline in risk assets across the board. The current market is tracking closely the 2000 moves down in the S&P 500, implying a panic low right ahead in the upcoming months (My views do not matter; kindly pay attention to the levels). A dollar rally is a likely catalyst.

The S&P 500 is correcting from recent highs. We have bounced from recent lows without capitulation. This suggests the lows may not be in, and the regime has changed from buying the dip to selling the rip. We may get a final flush down soon. Risky assets should continue breaking to the downside as earnings growth falters. The Fed has aggressively tightened into a recession. Deflationary busts often begin after major inflationary scares. The Dollar, commodities, and bond yields are flashing significant warning signs.

Global yield curves have inverted a second time after the recent steepening, reflecting the arrival of a significant economic slowdownFollowing the recent steepening of the yield curve after the first inversion, this second inversion is complete, and currently, steepening, which is a precursor to the next recession, and the riskiest assets will underperform going forward under such conditions. 

The critical levels to watch for the week are 6015 (up) and 5985 (down) on the S&P 500 and 25100 (up) and 24900 (down) on the Nifty. A significant breach of the above levels could trigger the next big move in the above markets.  High beta / P/E will get torched again and is a sell on every rise. Gold increasingly looks like the asset class to own over the next decade (currently correcting). Gold exploded almost eight times higher over the decade following the dot-com bust in 2000. Imagine what would happen to gold as this AI bubble bursts. You can check out last week’s report for a comparison. I love your thoughts and feedback.

 

 

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My Asset Allocation Strategy (Indian Market)

Cash - 40%
Bonds - 20%
Fixed deposit - 20%
Gold - 5%
Stocks - 10% ( Majority of this in dividend funds)
Other Asset Classes - 5%

My belief is that stocks are relatively overvalued compared to bonds and attractive buying opportunities can come along after 1-2 years. In a deflationary scenario no asset class does well other than U.S bonds, the U.S dollar and the Japanese yen, so better to be safe than sorry with high quality government bonds and fixed deposits. Cash is the king always. Of course this varies with the person's age.