27th November 2023 – 1st December 2023 | Another week in the markets
| S&P 500 | Nasdaq | VIX | DJIA | Russell 1000 | NYSE |
| 4,594.63 | 14,305.03 | 12.63 | 36,245.50 | 2,935.50 | 16,263.75 |
| 0.77% | 0.38% | 1.36% | 2.42% | 0.34% | 1.75% |
| Nifty 50 | Gold | Silver | Brent crude | USD-INR | EUR-INR |
| 20,267.90 | $2,091.70 | $25.895 | $74.38 | 83.18 | 90.53 |
| 2.39% | 4.39% | 6.19% | -1.06% | -0.16% | -0.75% |
Source: MarketWatch
Hello Saturday,
This week, shares of Tata Technologies makes a bumper debut, the U.S. economy’s growth rate touches 5.2% in Q3, and fast-fashion group Shein files to go public in the U.S.
- The U.S. GDP rises at an upwardly revised 5.2% rate in Q3, attributable to better-than-expected business investment and more robust government spending
- OECD’s Economic Outlook states that the global growth, projected to be 2.9% in 2023, is expected to weaken to 2.7% in 2024
- Shares of Tata Tech surge 3-fold to ₹1,200 from the IPO price of ₹500 after bumper listing
- The 30-stock Dow Jones Industrial Average rallied 520 points on 30th November 2023, reaching a new high for the year
- The ultra-fast fashion retailer Shein files to go public in the U.S., setting up one of the largest IPOs in recent years
Taking stock | G-Dollar-P | Global growth | 1PO | Not DOWn | SHEIN for the win | Invest wisely
Taking stock
The S&P 500 gained nearly 9% in November, making it the best month in nearly a year and a half. Key drivers of this rally seem to be the economy’s persistence in defying the impact of high interest rates, downward-trending inflation, the Fed’s signal that it doesn’t need to continue tightening policy, and corporate earnings exceeding estimates. The major indices ended higher for the week, with the S&P 500 Index and Nasdaq Composite rounding out their best monthly gains on Thursday. As for the previous week, the S&P 500 gained 0.77%, the Dow and the Nasdaq rose by 2.42% and 0.38%, respectively.
G-Dollar-P
The U.S. economy grew at an annualised rate of 5.2% in Q3, revised from 4.9%, exceeding the predictions of Dow Jones’ panel of economists.
Increases in nonresidential fixed investment, which includes buildings, machinery, and intellectual property, were mapped to be the leading cause of the upward revision. But, even though the category saw a 1.3% increase, it still represented a significant decline from prior quarters.
The Q3 estimate was also an effect of government spending, which increased 5.5% from July to September. Consumer spending, however, saw a downward revision, rising just 3.6% as opposed to the initial estimate of 4%.
The largest economy in the world, the U.S. economy has shown resilience despite the Federal Reserve hiking interest rates 11 times since March 2022 to combat the worst inflationary wave in 40 years.
Global growth
According to the OECD’s latest Economic Outlook, global growth is expected to stay moderate due to tightening necessary monetary policy – around hike in policy rates, and interest rates for new corporate and mortgage loans, – weak trade, and decreased confidence among businesses and consumers.
According to the Outlook, global GDP will grow by 2.9% in 2023, weaken to 2.7% in 2024, and is projected to grow to 3.0% in 2025.
As it did in 2023, Asia is predicted to continue contributing the most to global growth in 2024–25. By 2025, it is estimated that the cost pressures will subside, and consumer price inflation will steadily return to central bank targets in most economies.
The OECD countries are predicted to see a decrease in consumer price inflation from 7.0% in 2023 to 5.2% in 2024 and 3.8% in 2025.
Source: OECD Economic Outlook, November 2023
1PO
Tata Technologies made a spectacular debut, listing at a 140% premium and rising to nearly three times the IPO issue price.
With an issue price of ₹500, Tata Technologies IPO opened at ₹1,200 on the NSE and ₹1,199.95 on the BSE. Within minutes, it surged 180% above the listing price to ₹1,400.
According to analysts, the company’s business model is expected to maintain its high demand due to the growth potential in outsourcing. Analysts have also advised that the stock can bear fruit from a long-term ownership perspective.
As anticipated, a bumper listing that surpassed projections has benefitted from the Tata brand’s heritage. Tata Tech focuses on the Engineering Research and Development sector, particularly in the automotive and new energy vehicle domains.
Not DOWn!
With the Dow Jones Industrial Average rising 520 points on Thursday and the financial markets recording their most significant monthly gain in over a year, stocks finished November on a high note.
The Personal Consumption Expenditures report indicating that inflation is continuing to decline cheered investors, and as a result, the Dow rose 1.5% to close at 35,951 points.
Despite the Fed’s vigorous efforts to control inflation, Wall Street analysts remain optimistic about the U.S. avoiding going into recession.
Even though the country’s unemployment rate has increased to 3.9%, the highest level since January 2022, most economists have predicted that the labour market will avoid the severe decline that has historically followed sharp increases in interest rates.
In November, the three major stock indices all showed positive returns. The S&P 500 gained 8.9%, marking the most significant monthly increase since July 2022, while the Dow gained 8.8%. November saw a nearly 11% increase in the tech-heavy Nasdaq, driven by robust corporate profits.
Sheingri La
In what is expected to be one of the most extensive initial public offerings (IPOs) in recent history, the ultra-fast fashion retailer Shein filed to go public in the US this last week.
The bid is expected to be well-received by investors, regulators, and those in the sustainable fashion industry.
Over the past year, Shein has come under more scrutiny; independent designers and H&M have filed copyright infringement lawsuits against the company, and lawmakers have started looking into its business practices, including any potential links to forced labour in China. In the meantime, proponents of sustainability worry about the impact of a business strategy that pushes customers to purchase more clothing than ever before.
This has been set against Shein’s alleged preparations for an anticipated IPO bid, which has now materialised.
Invest wisely
After the November rally, experts foresee that the market may slouch as we enter 2024. From both domestic and global standpoints, the last month of the year is expected to be affected by the state election results, the crucial Lok Sabha or general elections in 2024, geopolitical issues, and the Fed’s sentiment on cutting interest rates.
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Warm regards,
Another week
in the markets
