, 18 tweets, 7 min read Read on Twitter
Trying to understand the Macro, The Big Picture of the Markets.
A bird's eye view of the fundamentals.
Purpose of the thread is to consolidate interviews/opinions at one place.
RBI is likely to stay on hold, as inflation is likely to remain within its medium-term target of 4%, India's GDP growth to remain robust in 2019, supported by tailwinds from recent policy reforms (GST and bankruptcy code implementation)

Global growth will moderate. Developed markets will slow but emerging markets will stabilize. The Federal Reserve is expected to pause in the middle of this year. US dollar has peaked and EM inflation is at a 15-year low. EMs are in a better shape.

Growth slowdown is something that is going to happen globally be it in the US, China or elsewhere. This is because we have seen a huge amount of stimulus in the past. The monetary policy, which was too loose, is getting tightened now.

Any fiscal slippage, RBI’s interest rate trajectory, outcome of the general elections and the revival of corporate earnings would be key monitorables. Macro parameters such as oil prices, bond yields and liquidity, now appear to have turned favorable

The Reserve Bank of India will definitely shift its stance from "calibrated tightening" to neutral in the next policy. Possibility of a rate cut sometime in the April to July period. Fiscal deficit at worst will be 3.5 percent for FY19

If the providing of QE took 10 years to help the economy (and only a tiny fraction of it was actually responsible) then the taking away of this money won’t do much.

Lower oil prices and lower interest rates can lead to visible earnings growth
There may be some pressure on rural consumption this year
We are looking at sectors, which have significant order flows
Our investment philosophy is routed in return on earnings
Oil prices corrected from $85 to $55-60 range, 10-year yield down from 8.25 to 7.5, rupee back from 74 to 69-70, banking liquidity from Rs 1,50,000 crore negative is now roughly about Rs 45,000-50,000 crore negative.

-BofAML sees double-digit fall in Indian stocks in first half of 2019.
-Domestic market is over-valued.
-Only sector that can work for investors is banking, as the lenders come out of the dud assets problem.

Volatility in the first half of 2019 may come from global politics.
Much of the pain in midcap and smallcap stocks has come out.
Private sector banks continue to be fancied by investors, and rightly so.

Globally, the overarching themes would be trade war and its outcome, rate increase/monetary tightening and geopolitical stability, while in India, health of its financial system, the outcome of general elections...

RBI to hold rates in H1CY19, Positive on PSBs, insurance companies, neutral on tech, underweight on auto

In US there is a clear indication of a slowdown. This quarter’s earnings will be little bit under pressure. It is early days for a rate cut because while the inflation footprint is good, the overall growth, GDP and GVA have all been pretty good.

India Inc’s profit-to-GDP ratio at a 15 year low

Nomura sees GDP slowing to 6.6% in H1 on polls, global slowdown

Markets will rally after elections. So it is just a consolidation phase for the next three months. We are in a cycle in terms of where it is going to turn around upwards in a few months

The fourth quarter results are likely to be weak as companies are unlikely to take big decisions before the general elections

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