Hello reader, hope you’re doing well. The momentum in the market has picked up again and the undercurrent has the potential to take the benchmark indices to new highs. The global support to the bullishness is coming from the mother market US where the market is resilient supported by better-than-expected Q1 GDP growth of 2 percent and declining weekly jobless claims. This resilience of the US economy, which was not anticipated and discounted by the market, is the strongest pillar of support for the global markets now. In July the market trend will be influenced by auto sales numbers in June, Q1 results, progress of the monsoon and the Fed rate decision and commentary by month end.
US economic indicators suggest that the “rolling recession” might be turning into a “rolling expansion.” It seems the permabears will have to postpone their imminent recession yet again. The housing market is recovering from its recession that started early last year. The manufacturing sector is showing signs of bottoming, and nondefense capital goods orders excluding aircraft hit a record high in May. Consumer confidence is on the rise as job openings remain plentiful. Despite these positive developments, regional surveys of prices paid and received remain disinflationary. The stock and bond markets seem to share similar optimism about the fundamentals. So, while the economic landscape is complex, the signs point to a rolling expansion rather than an imminent recession.
As always, risk management is key, and a proper system in place prevents one from losing out too much, in case of outlier events. Have a good trading day, and may the force be with you!
Disclaimer: this post is for educational purposes only, we are not SEBI registered analysts. Trades mentioned here are not trade recommendations. Equity Investments are subject to 100% market risk, please consult your financial advisor before investing.