US Markets Update, What's coming this week?

U.S Markets were closed on Monday, May 24th 2009, on account of Memorial Day. Due to the upcoming long weekend, markets saw low volumes last week and ended the uncertain week lower, with both Dow and S&P500 reporting weekly losses. Markets were weak also due to fresh warnings that S&P may downgrade the credit rating of U.S and U.K

Dow ended at 8277 down 5.69% for the week.

S&P500 ended at 887 down 1.8% for the week. 

Nasdaq ended at 1692, only index positive for the week.

This week we may see some initial trouble in world markets due to  North Korea's successful Nuclear Test. Other key economic data coming this week, which may influence the markets are: 

May 26, Tuesday: Consumer Confidence data for April will be released. 

May 27, Wednesday: Existing Home Sales data for April will be released.

May 28, Thursday: New Home Sales data for April will be released. 

May 29, Friday: The revised GDP forecast for Q1 will be released. This data is traditionally known to be a Market Mover. 

Get more latest US Maket news, views and insights at Stockezy.com

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My Thoughts - Elections, Market Correction, Political Uncertainty

The Indian stock markets have had a dream run in the last one month. The Bombay Stock Exchange sensitive index - Sensex - has climbed a staggering 39% since the low reached on March 9, 2009. It is thus one of the best performing Asian Index and better performing indexes with respect to global markets. 

But election uncertainty seems to be getting ripe. We end elections on April 30th, which started on April 16th. The Counting of votes starts on May 16th. I do not think there would be a clear majority, with neither Congress nor BJP claiming absolute power or control in the Lok Sabha.

Which means new equations and ugly preferential tie-ups and coalitions based more on convenience than any principal or common charter. 

The 3rd front which claims to be sworn enemies of both Congress and BJP may break convention and join hands with one of the leading parties. Don't forget this has happened in the past, when left joined congress, saying they want BJP to be out, we need a secular government. Don't be too surprised if this same scenario is repeated again this year.

With every ugly coalition comes a compromise, which is paid in turn by the country, the public and over all growth suffers. We have seen this in the last 5 years. Every move to non-regulate business, privatize and increase FDI was faced with stiff competition from the Left Parties. Congress in turn could not bring about the much needed reform in the banking, insurance and other sectors. Result is simple - plagued growth. 

We all know that the myth that Indian markets will remain isolated from global economic crisis was shattered completely. Most recent indication is ICICI whose profit fell 35%.

The New-India as I would like to call it, does not need another 5 years of handicap progress. We need to run and cannot afford to limp. I do not see progress, hence do not see a healthy stock market at least in the next 1 month. 

Trade Cautiously, Book Gains. Be Bullwise and Bearaware.

Find me at tushar@stockezy.com

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US Markets Report, Bank Stress Test, Obama's 100 days of Presidency

U.S. Markets ended the week on the positive note with the Dow Jones Industrial Average closing at 8076:

Up 1.5% for the day, Down 0.68% for the week, Down 7.98% YTD

The Nasdaq or better known as Technology Index did fairly well in comparison closing at:

Up 2.55% for the day, Up 1.27% for the week, Up 7.44% YTD

The broad S&P500 Index closed at 866:

Up 1.68% for the day, Down 0.39% for the week, Down 4.10% YTD

This upcoming week there a lot of events which will influence the markets:

April 29: Marks the 100th day of President Obama's Presidency. A report card of sorts will be presented. Where market, american public as well as media from around the world will be scrutinizing the new president's policies and performance.

April 29: The GDP number or the rate of growth of american economy will be released on Wednesday.

April 29: The FED will give its Interest Rate decision

April 30: Personal Income and Spending information for the consumer for the month of April.

May 1: U.S. Auto makers report car sales for the month of April.

May 4: The Treasury Bank Stress Report is released.

There is far too much hype around this piece of information. It is not that a lot will be known at the end of day about the true health of each of the banks and it is well known that nearly all banks will get a clean report. But Wall Street has raised its expectations and there is much expectation which may lead to uncertainty and volatility in the market for this week. Banking stocks will be under the scanner and one can expect wild swings in the share prices.

How all this affects Indian Markets?

This is a short spread trading week with only 3 active trading days. There is expiry on wednesday the 29th which will be our last day of the week. Thursday and Friday markets will be closed. Elections results and speculations of who will form the next government will lead the market sentiment next week.

Over all I will be cautious in my moves this week.

-Tushar

stockezy.com

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U.S. Markets and Wall Street Report for this week

The week ending April 17th was very eventful for U.S. Markets. After much see-saw mid week the Dow, Nasdaq and S&P 500 closed in the positive. 

 Dow closed at 8131 up 0.59% for the week. Down 7.35% year to date.

 Nasdaq closed at 1673 up 1.24% for the week. Up 6.09% year to date.

 S&P 500 closed at 869 up 1.52% for the week. Down 3.73% year to date.

Last week we saw better than expected earnings from Dow bell-weather GE, Citibank reportedly loss less money than expected being helped by changes in mark to market accounting rules. Also financials rallied led by JP Morgan Chase andGoldman Sachs who turned out profitable Q1 and also vowed to return the government TARP ( troubled assets relief program) at the earliest.

If last week belonged to Dow components surely this week will be a Hot-Nasdaq week, with Microsoft and Apple reporting earnings. Also reporting earnings will be IBM, Morgan Stanley, Bank of America, MacDonalds and Coca-cola. So lot's of action this week, which may lead to make or break in the market. 

Another key economic indicator data to be expected this week includes - Existing home sales data to be released on Thursday. On Friday we have the report on New home sales, both real estate data points are for the month of March.  Also on friday the government will release Durable Goods Orders and Shipments data for end of march. This is a leading indicator of U.S. manufacturing activity. 

U.S. markets are lead the global economic crisis and are also expected to suggest how and when the trends start moving upwards. Keep yourself ahead of the markets with news and community prediction data from wall-street, visit -http://stockezy.com/US/

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Wall Street Report for this week

On the backdrop of outstanding performance from U.S. Markets as well as dream run on domestic Indian bourses, Sensex and Nifty this week is more than interesting. Classic catch-22 situation, where technical indicators daemonly shout of an upcoming bear fall, but market sentiment defeats all by continuing to move higher. There is some important news-events coming up on Wall Street which are of importance and will help retail investors gauge as well set individual market sentiment.

Earnings season takes center stage this week with market behemoths such as General Electric and Financial Czars like Golman Sachs, JP Morgan Chase, Citibank all announcing Q1 results this week. Also stating results are Johnson & Johnson and Tech-King Google and Intel.

Goldman reported a blown out quarter today and has also decided to return U.S. government bailout money back in the coming quarter - More U.S. news? here

On April 14th we have the Producer Price Index data for March, which explains the costs of goods at wholesale level. Also on the 14th we have Retail Sales Figurers which help understand consumer buying behavior and available purchasing power.On April 15th government releases Consumer Price Index data for March. CPI measures inflation of physical goods and services.

So a good chunk of important and market changing events scheduled for the upcoming week, after a holiday weekend. We ended last week with a Bang, setting expectations for an equally eventful coming week.

Check out U.S. Markets Data and Stock Quotes - now available on stockezy. Click here

See what the community thinks about Satyam merger - Click here

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Satyam to announce winning bid on Monday

Satyam Computer Services Ltd. will open the bids to buy a stake in the company Monday , Deepak Parekh , one of its government-appointed directors, said Wednesday. The Satyam board has asked S. P. Bharucha , a former chief justice of India, to oversee the sale process. Mr. Parekh had said Saturday Satyam will decide on the winning bid Monday.

With Friday being a holiday hence no trading day, this gives us one last chance to enter in to Satyam related stocks like Spice Communications , which had a tremendous run yesterday registering nearly 18% gains intra-day . LNT is on a roll being up nearly 5%. Tech Mahindra is up 2%.

But there is certain amount of risk here, the company which does not win the bid will be on Bear-Radar and can go in to free-fall mode. So let's just say this is a risky trade to get in to.Worst case scenario if IBM is to win the bid, we will see the Indian companies give up gains and we may even see up to 10% fall in prices.

In my personal opinion, Satyam is a buy under 45 to reach at least 50-52 levels. This is a win-win situation for Satyam so can be safely bought for a short term trade. See my Satyam Stock Pick here

What do you guys think?

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How to better the current economic situation in India

Economic Times in an article today reported that the based on the lower the expected Inflation numbers (0.44% ) the Reserve Bank of India must further cut its Repo, Reverse Repo and may be CRR rates to provide necessary stimulus to the economy. We all remember that RBI already has cut its rates to record minimum, the latest cut being announced on March 4th, which led to repo rate being brought down from 5.5 to 5%, and the reverse-repo down to 3.5% from 4%.

What do the rate cuts serve to achieve? - Encourage banks to ease consumer and business borrowing by offering lower lending rates.

Well this makes sense in theroy, but is the consumer ready to borrow? Is he or she ready to invest in a car or home or decide to increase their discretionary spending? I do not think so.

The consumer has retreated in to a shell, from where it is difficult to spend money. But why are they consumers so wary of spending? The underlying problem is the fear of uncertainty about tomorrow. If we take a back in to the past 6-8 months, the words slowdown and/or recession were being mocked at in India. The so-called pundits helped build a wall around peoples minds telling them that India will remain more or less unaffected by the ills of the credit crisis plaguing US and much of the major economies. This mis-information shrouded us for taking precaution and preparing ourselves for the upcoming misery. And when the truth dawned up on it was too late to take any evasive action and because it was so sudden the impact has been far more worse.

But who is to blame for all of this. The pundits, the media, the newspapers, TV programs? The onus lies on each and every one of us. If it is our hard earned money we are investing in the market, then we cannot blame someone else for our losses. We had to stay more informed and follow information without verifying and applying logic to it. In one way we cannot even trust the government. If you remember the speech in Feb-08 from P Chidambaram he was very confident of India continuing on the pace of 8-9% fiscal growth. Even 6 months in to 08 the finance ministry did not forewarn or raise flags of possible reactions to the credit crisis of US and Europe.

Today the condition is so bad that business big or small, individuals rich or poor, in one way or other are feeling the pinch. The Elections provide another reason for the consumer to push oneself further deep in the shell. The announcement of the Third Front, Mayawati being projected as the prime ministerial candidate, Congress and BJP not being strong enough to win a majority leads to many investors to believe that the economic stimulus, change in fiscal policy needed to fight the downturn may not be able to come till July-August time frame.

So should the RBI cut rates again? Will this have a big impact on the current state of the economy? Will bank easing borrowing rates encourage people to buy new homes or new cars?

It is the weekend, definitely something for all us to think about !

You can find me at Stockezy.com - or tushar@stockezy.com

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The great Indian Mobile Revolution

Despite the current economic gloom the mobile phones business in India is continues to surprise and continue to boom. Led by worlds lowest call rates and availibility of cheapest handsets this is one sector which promises continued growth in otherwise troubled times in Indian economy.

To give you some insight to the kind of acclerated growth being seen in India' mobile market, let me highlight some key numbers. In January of 09 alone a the mobile market added 15.4 million new wireless subscirbers the biggest monthly growth ever.

To see this magnitude of unprecedented expansion in the telecom sector in the midst of deep slowdown in consumer demand and cut-back in domestic spending is proof enough that there is tremendous potential for staying invested for the long term.

The Indian mobile market boasts the most fierce and cut-throat competition and at the same time offers the worlds lowest call rates . But this is no bad news. Afforadibility is seen as the single-most important catalyst which is fueling this rapid growth.

Customers pay less that 50 paise for a call and new handset can be bought for as little as Rs.750. It is no surprise that India has now surpassed China to be the worlds fastest growing cellular market.

>> The beginning of the mobile revolution
It is not just affluent indians who are buying mobile phones, but the real growth is driven by the poor; Labourers, maids, drivers and other lowly paid people in cities are now buying mobile phones too.

The mobile service providers are aggresively rolling out new networks, sharing infrastructure costs and aiming to drive the mobile revolution deeper in to India's poorer markets. In rural areas the farmers are using mobile phones to call other farmers to find out market price for crops and also to stay in touch with distant relatives more often than before. The rural market of India presents a new opportunity to expand growth further.

The key to this surge in rural mobile subscriptions is due to the fact that these people are not affected by the global crunch. They do not own shares, or real estate hence are not being hit by the US credit or mortgage crises. There is enough employment for all and the crops being produced are to a great extent being consumed by the domestic markets.

>>Opportunity for further Growth for Cellular Companies
Rural India accounts for 70% of the 1.1 billion total population. Till the end of January of the total population who own a telephone only 9% were situated in rural areas, hence it is obvious that the next acclerator for mobile growth will come from rural india.

Expected growth : The forecast for 2010 is for total mobile subscirbers to rise to 525 million , and rise further to 740 million in 2012. The telecom providers know this fact and are moving fast. Bharti Airtel, Reliance Communication and Idea Cellular are 3 top Private service providers, followed by BSNL and MTNL which are backed by the government.

BSNL also announced rollout for 3G services in 700 cities in India by July 2009. This is another encouraging piece of information which will allow added revenue from data services, email and more profitable Business and Enterprise customers.

Stocks to Watch out for:

• Bharti Airtel ( view quote ),
  
• Idea Cellular ( view quote ),
• MTNL (view quote )

Bharti is a very experienced player in the market and has the reach and financial backing to aggresively invest in newer markets, rural as well as Urban.

Idea already has good reach and is expanding on its customer base in rural India and is beginning to establish itself in urban towns and cities with pervasive advertising campaingns and publicity.

MTNL is backed by the state and is expanding is data networks bringing Internet to the rural areas which has good potential in the coming years.

I am not too optimistic about Reliance Communications due to continued hinderance caused by Mukesh Ambani Group. In my opinion the telecom sector will see M&A activity and ADAG-Mukesh Group standoff creates uncertainity which is not good for the stock price.

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The source for numbers and facts & figures provided in this article are coutesy: The Associated Press. The original article can be found at STOCKEZY.COM - India's Social Investing Community. You can connect with me at tushar@stockezy.com

Also I would like for you to check out http://stockezy.com/answers/

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Indian Railways & Lalu Yadav, the truest success story

The Indian Railways has always been the worst managed India Public Sector enterprise, at least till before Lalu Yadav the magician came along as Indian Railways Minister under UPA/Congress government. The Railways which has been notorious for being a loss making enterprise has seen much radical changes over the last 5 years.

Long known for incurring losses , the Railways has dramatically improved under Prasad's tenure by enhancing technology and cutting fares to boost traffic. The growth rate in the volume of goods carried by the Indian Railways has doubled to an average of 8% in the last five years from 3% in 2000-2001 . The Railways expects total number of passengers to climb 7% in the current fiscal year and in the next .

Mr. Prasad said the Railways will likely end the current year through March with a surplus of 193.2 billion rupees and pay 47.11 billion rupees to the federal government as its share of the profit. The Railways expects total income from moving people and goods in the next fiscal year to rise 13% to 931.59 billion rupees from an upwardly revised estimate of 823.93 billion rupees in the current year ending March.

In this years interim railway budget Lalu Yadav has kept the human aspect alive and focussed on keeping freight prices low and cutting passenger fares across the board by 2%. Also giving a boost to the infrastructure & employment sector,

• 43 new trains will be launched
• $7.8 billion to be spent to moderize 63.000 km of railway network

We saw some companies surge ahead one being Titagarh Wagons. (Also read related posts : Kalindee Rail Dissapointed After Budget    and        Rail Related Company's Surge )

Coming of May and a new government the new railway minister will surely have some important and big shoes to fill. Let's see how things go forward till then we can all thank Mr Yadav for giving us Indian Railways the Jewel of India and India's Truest Success story

Connect with me at http://stockezy.com/profiles/tushar/

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Using common sense to invest for the long term

Got thinking this weekend about how should I plan my investment for the next 3-6 months. I do dabble in stocks for short term which are mostly based on news, intra-day calls from members on stockezy. But usually I am someone who likes to invest long term. This weekend over a cup of coffee made me think to visit some of the beaten down names in the commodity sector. 

Copper, Steel, may be building materials such as Cement. Let's Think Aloud together as to why this may be a good time to invest in companies like Tata Steel, ACC, Hindustan Copper, Sterlite, SesaGoa, Hindalco and other related companies. 

Materials of any type which help build & re-build the backbone infrastructure of our country such as roads, bridges, railway lines, ports, electrical grids, power stations all our going to be in demand. Now some may disagree but I have a reason for this. 

Now coming back to why I like commodities. One assumption I am making (which is also my risk quotient) is that I trust the government of India to execute moderately well in spending money allocated for the Stimulus Plan. We need for our government to invest in the country. 

• Move tenders to build roads, railways and ports, power stations
• This helps Engineering company's to get government orders
• To build you need construction materials
• To build you need heavy engineering equipments
• To build you need to employ labor, hence create employment

The government can use its cash reserves to fuel demand and growth and put the country back on its feet. At least to walk if not run. We may have rate cuts, we may have bailouts, we may have tax cuts - but to invest in building the country's infrastructure is the best way to stimulate the economy. I think this may be a win-win situation. 

A win for the consumer, A win for the private sector, A win for country. This may be the best time to invest for a better & bright future. 

You can read about the stocks I recommending at stockezy.com  - click here

Disclaimer - Yes this is necessary. I am no stock-pundit or analyst. I am common man who reads his newspaper, uses common sense to make investing decisions. I do see price-trends on the stock-charts available on stockezy. Try to do homework about my stocks. I am a software engineer by profession.

I am also the co-founder & CEO of stockezy.com - India's Social Investing Community. I usually blog on stockezy, but also like to share my comments here on my good friend Chirag's blog. I would love to hear from the readers of IndianMoneyPlus, you can connect with me at tushar@stockezy.com.

Cheers!

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