About

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.

Tuesday, 12 July 2016

Chart of the Week - Historical Inflation View

The chart of the week is courtesy MarketWatch and shows inflation levels over time. We have been in a dis-inflationary phase for over 20 years now and could soon enter a deflationary spiral as record levels of quantitative easing (QE) have failed to spark an upthrust in inflation:

Sunday, 10 July 2016

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning July 11

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	2130, 1.28%	Bullish	Bullish
Nifty	8323, -0.06%	Neutral**	Neutral
China Shanghai Index	2988, 1.90%	Bullish	Bullish
Gold	1367, 1.67%	Bullish	Bullish
WTIC Crude	45.12, -8.44%	Bearish	Bearish
Copper	2.12, -4.39%	Bearish	Bearish
Baltic Dry Index	703, 3.84%	Bullish	Bullish
Euro	1.105, -0.80%	Bearish	Bearish
Dollar/Yen	100.45, -2.03%	Bearish	Bearish
Dow Transports	7683, 1.66%	Bullish	Bullish
High Yield (ETF)	36.07, 1.52%	Bullish	Bullish
US 10 year Bond Yield	1.37%, -6.18%	Bullish	Bullish
Nyse Summation Index	915, 12.16%	Bullish	Neutral
US Vix	13.20, -10.63%	Bullish	Bullish
20 DMA, S and P 500	2080, Above	Bullish	Neutral
50 DMA, S and P 500	2078, Above	Bullish	Neutral
200 DMA, S and P 500	2026, Above	Bullish	Neutral
20 DMA, Nifty	8217, Above	Neutral	Bullish
50 DMA, Nifty	8059, Above	Neutral	Bullish
200 DMA, Nifty	7799, Above	Neutral	Bullish
India Vix	15.08, -4.16%	Neutral	Bullish
Dollar/Rupee	67.13, -0.09%	Neutral	Neutral
Overall	S & P 500	Nifty
Bullish Indications	12	12
Bearish Indications	4	4
Outlook	Bullish	Bullish
Observation	The Sand P 500 rallied and the Nifty was unchanged last week. Indicators are bullish. Markets are challenging resistance again. Time to tighten those stops.
On the Horizon	China – CPI, GDP, Australia – Employment data, England – BOE rate decision, U.S – Import price index, CPI, Retail sales, U. Mich. Consumer confidence, Canada – Rate decision

*Nifty	India’s Benchmark Stock Market Index
Raw Data	Courtesy Google finance, Stock charts, FXCM
**Neutral	Changes less than 0.5% are considered neutral

The Sand P 500 rallied and the Nifty was unchanged last week. Signals are bullish for the upcoming week. The Vix is suggesting complacency. The Yen, gold and treasuries are indicating a flight to safety. The markets are back at resistance and are likely to continue major breakdowns in 2016 after this rally concludes. The critical levels to watch are 2140 (up) and 2120 (down) on the S & P and 8400 (up) and 8250 (down) on the Nifty. A significant breach of the above levels could trigger the next big move in the above markets. You can check out last week’s report for a comparison. You can also check out support and resistance levels of the S and

P 500 and Nifty Indices. Love your thoughts and feedback.

Tuesday, 5 July 2016

Chart of the Week - Global GDP

The chart of the week is courtesy of Bloomberg and shows historic and projected levels for Global GDP. Global GDP has remained below levels observed before the great recession of 2008-2009 and is expected to remain so for the foreseeable future:

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.