India Economy May Pop As Inflation Drops - Barron's
Barron's Wholesale Tire. Previous. New Horizons Computer Learning Centers, with the Director of Training Services and ensure daily activities align with meeting these goals. Greeted and seated guests at the same time as monitoring the flow of guests in Account Manager at Phase 3 Marketing and Communications. “If you get a little trading volume, it could be the start of the next leg higher,” he says. Bahuguna, a senior portfolio manager at Columbia Threadneedle Investments. will be hurt by to percentage points for the same reason. The company is seeing strong wholesale growth in North America and. HSBC's Pranjul Bhandari, chief India economist, provides the latest inflation The government released a new and improved Wholesale Price Index Inflation as per the new WPI series has been consistently lower than the old series for 7 meeting that the print was lower than expected, but in the same.
The fall was broad based — in both annual and sequential terms, and across all the major categories. We believe that the RBI will acknowledge in its upcoming June 7 meeting that the print was lower than expected, but in the same breath reiterate the risk of higher inflation over the second half of the year. We expect rates to be on hold over the foreseeable future. Separately, the industrial production index for March was flat on a sequential basis.
Some improvement in capital goods was offset by weaker consumer goods production That said, for the month of March, while the IIP rose on a y-o-y basis, the seasonally adjusted m-o-m momentum was flat. Looking across components on a sequential basis, capital goods showed a slight improvement. However consumer goods production was a shade weaker, particularly consumer non-durables, which reflects rural demand.
If rains turn out to be normal over the June-September season, as is being forecasted by the weather office, it is likely to help keep inflation at bay and improve rural demand It is not immediately clear that the new series is an improvement. The old series seems more consistent with the path implied by the manufacturing PMI.
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In addition, the weakness of industry over the past few months that the new series points to is at odds with other indicators which suggest that activity has bounced back from demonetisation. A year Treasury bond offers a 2. Inflation is running between 1. Interest rates seem to be slowly bottoming, but we think that the year Treasury could yield between 3.
Duration risk in our minds is probably the greatest risk out there now within the fixed-income market. Matthew Furman By duration risk, you mean the sensitivity of bond prices to changes in interest rates.
What does that mean for your positioning in ETFs?
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Will the bottom fall out? Will investors lose all their money?
But there is only one reason rates will go up, and that is an acceleration of the nominal economy. By that, do you mean economic growth, plus inflation? The whole world is turning out to be like Japan after its credit bubble burst. So how are you investing today? Both are significantly mispriced relative to other fixed-income asset classes. The market was saying munis were riskier than Iraq bonds.
There was this notion that every municipality was going to go bankrupt, and pensions were going to ruin the future. Is there still value in high-yield municipals?
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Treasuries we hold because they are, right now, negatively correlated to every other asset class. People are going to have low, but positive, returns in fixed income.
Why is this a good time for riskier bonds? In the first quarter of this year, valuations for riskier assets got ahead of themselves, and we cut back, especially on corporate bonds.
In the middle of the year, the forces of emerging market growth being dragged down by China really caused commodities to tumble, and currencies to get repriced. We quickly went into an environment we felt was overly pessimistic, and so started to build up some of the riskier parts of our bond portfolio in late August.Who - Won't get fooled again 1971
Which riskier aspects of the bond market are particularly attractive now? Both areas are more fairly valued now. Financial companies, the primary issuers of preferreds, are in better shape. The Federal Reserve has been the elephant in the room with regard to fixed income for years now. What should investors be preparing their portfolios for? Mark Cortazzo is on the front lines with retirees, ensuring steady income. When clients ask whether rates are going up, my question is, in what market?
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Rates will rise on the short end of the market—for bonds that mature in about a year. The only other developed capital markets that have yields higher than us are Australia and New Zealand. International fund flows will keep rates a little lower for longer because there are no other alternatives. Plus, if we have a secularly appreciating dollar, that makes U. What are you trying to accomplish with fixed income, and when are ETFs a good fit for these goals? Investors typically buy bonds for three reasons.
A third has to do with liquidity: Can you sell it rapidly? We make no claims to know anything about Coke versus Pepsi. We specialize in asset allocation—sizes, style, geography—so ETFs are right in our wheelhouse.
Fixed-income ETFs give us a great way to get exposure to various segments of fixed-income markets, and help us diversify the portfolio and reduce volatility.
Is fixed income more about diversification and less about generating income for you? We look at fixed income as the port in the storm. When we use ETFs for individuals who need an income stream, some of the specific-maturity ETFs can provide the diversification that they need. Are you talking about defined-maturity bond ETFs, which own bonds that all mature at the same time, in a specific year? Also, iShares has a series of ETFs that cuts out financials—for instance, the iShares iBonds Mar Corporate ex-Financials [IBCC]—which help with our risk-mitigation theme, since financials were at the center of the storm the last time around.
Take, for instance, trying to build a simple municipal-bond ladder from one to seven years, which is basically a buy-and-hold strategy. Is that because the muni-bond market is smaller and less liquid, so there may be few buyers in times of duress?
But issues can arise for clients, and they may need that money. So you use ETFs as a cost-effective way to build bond strategies? Retail pricing on single bonds is higher for individuals than for big institutions.
If you are paying 10 basis points [0. What about areas where you might not prefer ETFs? We build ladders with individual securities for our high-net-worth clients.