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.

Monday, 8 August 2016

Governor Rajan's Track Record at the RBI

A very short tenure but an impeccable track record nonetheless. Here is an overview of Governor Rajan's track record from CNBC TV18 as we approach his final RBI policy meet:

Sunday, 7 August 2016

Disecting the Recent Trump Warning on the Stock Market

Donald Trump recently issued a warning on the stock market suggesting a collapse is imminent. Here is some analysis of those views from the The Dollar Vigilante:

Market Signals for the US stock market S and P 500 Index and Indian Stock Market Nifty Index for the Week beginning August 8

Indicator	Weekly Level / Change	Implication for S & P 500	Implication for Nifty*
S & P 500	2183, 0.43%	Neutral	Neutral
Nifty	8683, 0.52%	Neutral**	Bullish
China Shanghai Index	2977, -0.09%	Neutral	Neutral
Gold	1344, -0.99%	Bearish	Bearish
WTIC Crude	41.80, 0.48%	Neutral	Neutral
Copper	2.15, -3.04%	Bearish	Bearish
Baltic Dry Index	636, -3.05%	Bearish	Bearish
Euro	1.109, -0.77%	Bearish	Bearish
Dollar/Yen	101.79, -0.24%	Neutral	Neutral
Dow Transports	7867, 0.26%	Neutral	Neutral
High Yield (ETF)	36.04, 0.47%	Neutral	Neutral
US 10 year Bond Yield	1.58%, 8.50%	Bearish	Bearish
Nyse Summation Index	1103, -10.23%	Bearish	Neutral
US Vix	11.39, -4.04%	Bullish	Bullish
20 DMA, S and P 500	2165, Above	Bullish	Neutral
50 DMA, S and P 500	2119, Above	Bullish	Neutral
200 DMA, S and P 500	2045, Above	Bullish	Neutral
20 DMA, Nifty	8573, Above	Neutral	Bullish
50 DMA, Nifty	8357, Above	Neutral	Bullish
200 DMA, Nifty	7857, Above	Neutral	Bullish
India Vix	14.35, -3.79%	Neutral	Bullish
Dollar/Rupee	66.84, 0.18%	Neutral	Neutral
Overall	S & P 500	Nifty
Bullish Indications	4	6
Bearish Indications	6	5
Outlook	Bearish	Bullish
Observation	The S and P 500 and the Nifty were up slightly last week. Indicators are mixed. Markets are at resistance. Time to tighten those stops.
On the Horizon	China – CPI, Financing and loan data, India – RBI rate decision, New Zealand – Rate decision, Euro Zone – German CPI, Italy, German and Euro zone GDP, US – Retail sales, U. Mich. consumer confidence data

*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 S and P 500 and the Nifty were up slightly last week. Signals are mixed for the upcoming week. The Vix is suggesting complacency despite the market making nominal new highs. The markets are likely to continue major breakdowns in 2016 after this rally concludes. The critical levels to watch are 2190 (up) and 2170 (down) on the S & P and 8750 (up) and 8550 (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.

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.