Dalal Street Week Ahead: AUGUST 3RD Week | 2024 | P R Sundar

P R Sundar

11 Aug 202407:03

Summary

TLDRIn the 'Street Week Ahead' program, P Sund discusses the turbulent global markets, with the Japanese market falling over 10% and US markets crashing, affecting Indian markets as well. Despite the volatility, markets are stabilizing as Japan halts interest rate hikes and US economic data improves. The focus shifts to inflation data, with Indian and US reports expected. Sund dismisses the impact of the Hindenburg report on the stock market, as allegations against the Adani Group are not expected to cause a second shock. He predicts a normal market reaction, with retail and mutual fund investments supporting market stability.

Takeaways

📉 The last week was a brutal week for global markets with significant drops, especially in the Japanese market which fell over 10%.
📈 Despite the initial downturn, markets are showing signs of returning to normal with Japan announcing no further interest rate increases and US economic data not being as bad as previously reported.
🔍 Geopolitical tensions between Iran and Israel are not escalating, which is helping markets to stabilize.
📊 This week, markets will be focusing on various economic data releases, including Indian inflation data and US producer price index, consumer price inflation, and retail sales data.
💡 The speaker does not expect the Hindenburg report to have a significant impact on the stock market, as markets typically do not react to the same bad news twice.
📉 The first allegation against Adani caused a shock and a drop in the market, but the second allegation is not expected to have the same effect as the market has already adjusted to such news.
🤔 There was speculation about who the Hindenburg report would target, but now that it's released, other companies like Reliance and HDFC Bank are safe from unwarranted selling pressure.
📉 Adani Enterprises' stock has underperformed, falling over 10%, while the Nifty has risen by nearly 8% since the election results, suggesting insider knowledge of the report may have influenced the market.
💰 The speaker predicts that as long as retail money continues to flow into the market and mutual funds, the market will not fall significantly despite any allegations.
📉 The speaker suggests that the market opening might see some reaction to the Hindenburg report, but overall, it will be a normal market day.
👋 The speaker will provide more insights in a pre-market report the following morning, indicating ongoing analysis and updates.

Q & A

What was the market situation described in the script for the last week?
-The last week was described as brutal for global markets, with significant falls in the Japanese market by more than 10%, followed by a crash in US markets, and a subsequent impact on Indian markets with a gap down of about 300 points. The market experienced high volatility with large daily gaps up or down.
Why did the speaker forget to do the 'Street week ahead' program last week?
-The speaker forgot due to being preoccupied with a workshop in Chennai and only remembered just now, indicating a last-minute realization and preparation for the program.
What economic developments were mentioned as reasons for the market recovery towards the end of the week?
-The recovery was attributed to Japan's announcement of not increasing interest rates further, better-than-expected US economic data, and the de-escalation of geopolitical tensions between Iran and Israel.
What financial data will the markets be focusing on during the week discussed in the script?
-The markets will be focusing on various inflation data releases, including Indian inflation data on Monday evening, US producer price index on Tuesday, Consumer Price inflation data on Wednesday, and retail sales data on Thursday.
What is the speaker's view on the impact of the 'Hiden' report on the stock market?
-The speaker does not expect any significant impact from the 'Hiden' report on the stock market, as markets typically do not react to the same bad news the second time around, and the report's allegations are the second time they are being made against the Adani group.
What was the speaker's famous statement regarding market reactions to news?
-The speaker's famous statement is that markets do not react to the same bad news the second time. The first occurrence is a shock and a surprise, but by the second time, the market has already factored in the news.
What is the speaker's opinion on the allegations against the 'SE CH person' and their potential impact on the stock market?
-The speaker believes that the allegations against the 'SE CH person' will not affect the stock market because they are an individual and their investments in Adani group stocks are not significant enough to impact the market.
Why did the speaker suggest that Reliance and HDFC Bank would not be affected by the 'Hiden' report?
-The speaker suggested that Reliance and HDFC Bank would not be affected because the 'Hiden' report was released, clarifying that the allegations were not against these entities, and thus, they would not come under selling pressure.
What was the speaker's previous advice regarding Adani group stocks and Nifty before the parliament election results?
-The speaker had advised to short Adani group stocks and go long in Nifty before the parliament election results, anticipating a favorable government outcome.
How does the speaker explain the underperformance of Adani stocks despite a favorable government?
-The speaker suggests that the underperformance might be due to insiders already knowing about the allegations and that this information could have been reflected in the market prices, causing Adani stocks to fall while Nifty went up.
What is the speaker's prediction for the market's reaction to the 'Hiden' report release?
-The speaker predicts that there will not be a significant market reaction to the 'Hiden' report release, as it is the second time allegations are being made, and the market has already adjusted to such news.

Outlines

00:00

📉 Global Market Turmoil and Recovery

The video script discusses the dramatic events of the previous week in global markets, highlighting the significant drop in the Japanese market by over 10%, which triggered a similar reaction in the US and Indian markets. The script mentions the volatility experienced throughout the week with daily gaps of 200 points up or down. Towards the end of the week, the situation seemed to stabilize as Japan announced no further interest rate hikes and US economic data was not as poor as previously feared. Geopolitical tensions between Iran and Israel did not escalate, allowing markets to slowly return to normalcy. The script also touches on the upcoming focus on inflation data and the expectation of lower inflation figures. It addresses the second allegation against the Adani Group and the presenter's belief that it will not significantly impact the stock market, as markets do not react to the same bad news twice. The presenter suggests that insider information may have already been factored into the market prices.

05:01

📈 Market Outlook Amidst Allegations and Speculations

In the second paragraph, the script provides an outlook on the market's expected behavior in light of the Hidden B report and other financial data releases. The presenter dismisses the idea that the report will have a significant impact on the market, comparing the reaction to a ghost that loses its scare factor upon repeated encounters. They emphasize that the market has already priced in any potential insider information related to the report. The focus is on the continued retail money flow into mutual funds, which are capable of purchasing substantial amounts of stocks, thus supporting market stability. The presenter predicts a normal market reaction, dismissing the possibility of a lower circuit and suggesting that any morning sell-off would be short-lived. The script concludes with a teaser for a more detailed discussion in the pre-market report the following day.

Mindmap

Keywords

💡Street week ahead program

The 'Street week ahead program' is a financial analysis segment that discusses the upcoming market trends and events for the week. It is sponsored by a company and serves as a guide for investors to prepare for the week's market movements. In the script, it is mentioned as the program that the speaker is hosting, indicating the context of the discussion.

💡Global markets

The term 'global markets' refers to the worldwide financial markets where stocks, bonds, commodities, and currencies are traded. The script describes a 'brutal week' for these markets, indicating significant downturns and volatility, particularly in the Japanese and US markets.

💡Volatility

Volatility in financial terms refers to the degree of variation of a trading price series over time. The script mentions 'huge volatility' to describe the fluctuating nature of the market with significant gaps up and down, highlighting the uncertainty and risk in the trading environment.

💡Interest rate

Interest rates are the cost of borrowing money and are set by central banks. The script notes that Japan announced it will not be 'increasing any more interest rate,' which can influence the country's economic policies and market stability.

💡Economic data

Economic data refers to statistics that are used to assess the current economic health of a country or region. The script mentions 'US economic data' that was 'not that bad,' suggesting it had an impact on market sentiment and contributed to the market's recovery.

💡Geopolitical tension

Geopolitical tension refers to the strain between different nations due to political or strategic disagreements. The script cites 'tension in Iran Israel' and notes that it is not escalating, which can be a factor in market stability as geopolitical events can influence investor confidence.

💡Inflation data

Inflation data provides insights into the rate at which the general level of prices for goods and services is rising. The script highlights the focus on 'inflation data' for the upcoming week, indicating its importance for market direction as it influences monetary policy and consumer spending.

💡Producer price index

The producer price index (PPI) measures the average changes in prices received by domestic producers for their output. The script mentions 'some producer price index' as part of the economic indicators that the US markets will be focusing on, which can affect expectations for inflation and corporate profits.

💡Retail sales data

Retail sales data measures the total receipts of retail businesses for the sale of goods and services. The script refers to 'retail sales data' as another set of economic indicators that can influence market behavior by reflecting consumer demand and economic health.

💡Adani Group

The Adani Group is an Indian multinational conglomerate involved in various sectors. The script discusses allegations against the group and its impact on the stock market, suggesting that the speaker does not expect a significant market reaction due to the allegations being a second occurrence.

💡Insider information

Insider information refers to non-public information about a company that could affect its stock price. The script implies that 'insiders' might have known about the allegations against the Adani Group and that this information could have been reflected in the market prices before the news became public.

💡Open interest

Open interest in financial markets refers to the total number of outstanding contracts that have not been settled. The script suggests a range of '24,000 to 25,000' for open interest, indicating the level of market participation and potential future price movements.

💡Mutual funds

Mutual funds are investment vehicles that pool money from many investors to invest in a diversified portfolio of stocks, bonds, or other securities. The script mentions that mutual funds are receiving significant inflows, which can support the market and prevent it from falling due to the buying power of these funds.

💡Lower circuit

A lower circuit is a limit placed on the price a security can fall within a single trading day. The script dismisses the possibility of a lower circuit occurring, suggesting that the market is expected to remain stable despite any news.

Highlights

Introduction to the last Street Week Ahead program sponsored by Delta Exchange.

Apology for delay due to a workshop in Chennai.

Description of a brutal week for global markets with significant falls in Japanese and US markets.

Indian market's reaction to global market crashes with a 300-point gap down.

High volatility in the Indian market with daily 200-point gaps up or down.

Normalization of market conditions towards the end of the week.

Japan's announcement of no further interest rate increases.

US economic data not as bad as previously reported.

Geopolitical tensions between Iran and Israel not escalating.

Market focus on upcoming inflation data throughout the week.

Expectations of lower inflation and its impact on market reactions.

Discussion on the second allegation against Adani and its potential market impact.

Clarification that the Hidden Back report is not expected to significantly affect the stock market.

Speculation about the Hidden Back report's target prior to its release.

Relief that the Hidden Back report did not target Reliance or HDFC Bank, which have significant weightage in Nifty.

Analysis of Adani Enterprise's stock performance in contrast to Nifty's rise.

Market anticipation and potential overreaction to the Hidden Back report's release.

Assessment of the market's open interest and its resilience to allegations.

Prediction of a normal market reaction despite the Hidden Back report.

Final thoughts on the Hidden Back report's minimal impact and the market's stability.