Economy
Indian EPS growth is set for major disappointments vis-à-vis the lofty expectations. Weak domestic demand amid tight fiscal and monetary policy entails more downside in stock prices. Stay underweight.
The Fed hiked 25 basis points at yesterday’s FOMC meeting while also signaling that the tightening cycle is now on hold. We discuss the short-run and long-run implications for Treasury yields.
China’s reopening, combined with a slew of pro-consumption policy stimuli, will likely boost household consumption by 10% in nominal terms in 2023 from a year ago. Some of the hardest hit service sectors during the pandemic will experience a strong recovery. Within the A-share market, investors should overweight the consumer discretionary sector versus the Chinese CSI300 benchmark.
As the Fed meets today, we explain what it did wrong in 1970, 1974, and 1980 that prevented inflation from being exorcised, and the lessons for 2023-24. Plus, we identify a currency cross that could rebound in the next year.