Trump VS Federal Reserve?

02nd August 2024 – 10th August 2024 | Another week in the markets

S&P 500	Nasdaq	VIX	DJIA	Russell 1000	NYSE
5,344.16	16,745.30	20.37	39,497.54	2,915.44	18,267.15
-0.04%	-0.18%	-12.91%	-0.60%	-0.02%	-0.58%
Nifty 50	Gold	Silver	Brent crude	USD-INR	EUR-INR
24,367.50	$2,470.60	$27.54	$79.46	83.95	91.65
-1.42%	0.62%	-3.99%	2.45%	0.18%	0.25%

Source: MarketWatch 

Hello Saturday,

This week, US presidential nominee Donald Trump hints that he is readying for a showdown with the Federal Reserve, Investors are left swiping on Bumble as the dating platform gives a disappointing revenue outlook for the year and mutual fund SIP inflows go strong as they race past the ₹23,000 crore threshold.

• Trump indicates that he will tread over the Federal Reserve’s turf as President reigniting an old clash seen during Trump’s first stint.
• See you later say Bumble’s investors as the dating platform shares a miserable revenue outlook for the year.
• Trent’s share price leapfrogs to a record high of ₹6,375 after the apparel firm reports a 131% rise in net profit to ₹342 crore.
• July SIP inflows go over the ₹23,000 crore mark.

Taking stock | Trump VS Federal Reserve? | Bumble’s profile has no matches | Look who’s “Trent”ing | SIP back and relax | Invest wisely | Another week in the markets

Taking stock

Volatility remained the word of the week as all three major US indices battled with sudden turbulences and surprising recoveries. Nasdaq and the Dow Jones rose on Friday but managed to log weekly declines of 0.2% and 0.6%. S&P 500 closed the week with a marginal stumble of 0.4%.

Trump VS Federal Reserve? 

US Presidential nominee Donald Trump is re-invoking a fight with the Fed, glimpses of which were last witnessed during his first term as the US President. 

Speaking to reporters at a press conference, Trump said that he believes that he ought to have a say over how the Fed makes interest rate decisions. Economists and intellectuals, the world over, put enormous value on the independence of the Federal Reserve or the central bank of any country, and Trump’s renewed onslaught against the Federal Reserve’s independence raises a larger concern over the US’ anticipated banking and economic administration. 

Trump’s indication that he would like to have a say in the interest rates determination process is being read by many as a direct and unprecedented interference with the independence of the Fed.

Trump did not elaborate on the finer details of the role he envisions for himself but said that he is more qualified than Fed officials in monetary policymaking, chiefly because of his business experience. 

“I made a lot of money. I was very successful and I think I have a better instinct than, in many cases, people that would be on the Federal Reserve or the chairman.” Trump said.

Trump went on to say that the Fed’s decision were based on little more than “gut feeling” and that the central bank had “gotten it wrong a lot.” He also said that Fed Chair Jerome Powell is a  “little bit late on things. He gets a little bit too early and a little bit too late.”

This isn’t the first time that Trump has taken potshots at Fed Chair Jerome Powell. As President, Trump led the offensive against Chair Powell in social media posts, speeches and interviews pressurising the Fed to follow his whims. When Chair Powell did not relent to Trump’s bidding, Trump tweeted that he was a “bigger enemy” to the US than Chinese President Xi Jinping. 

Bumble’s profile has no matches

Bumble’s shares took a tumble this week after the company gave a disappointing forward guidance dragging down the revenue outlook for the year. There seems to be very little love lost between investors and Bumble as the dating platform’s app has toppled 61% since January.

On August 7, Bumble’s shares fell 29% in the largest single-day drop to $5.76.The Texas-based company is now hard at work reviving its fortunes and, to that end, has unveiled a re-design of the app.

Bumble expects revenue to grow by 1% to 2% instead of the 8% to 11% revenue growth range projected earlier.   

Our first chapter of the Bumble App launch delivered better women’s experiences and improved engagement,” Chief Executive Lidiane Jones said. “We are pleased with these early wins but it’s evident that to reignite the user growth engine for Bumble Inc. in the long term, we need to take a firm stance towards delivering customer value that goes beyond this launch.” 

For the third quarter of the year, Bumble has projected revenue to fare in the range of $269 million to $275 million, undercutting the $296 million expectation built up by analysts.

Look who’s “Trent”ing!

A robust Q1 performance sent Trent’s share price skyrocketing to an all-time high of ₹6,375. For the quarter ending June, the apparel retailer that runs Westside and Zudio outlets, reported a 131% rise in net profit to ₹342 crore, jumping from ₹148 crore in the corresponding quarter of the previous year.

The company’s revenue also registered a healthy growth of 57% to ₹3,992 crore on a year-on-year basis from ₹2,536 crore in Q1 of FY24.

Happy with the performance of the company, the investors rewarded the share with an 11% surge on Friday. 

The company is operational across 178 countries and is eyeing an expansion in its fashion format. Trent attributed the strong quarterly results to its strategic choices and disciplined operations, helping it to scale up profitably in a challenging and competitive market.

Emerging categories like beauty and personal care as well as innerwear and footwear contributed a sizable 20% to the company’s standalone revenue. Online platforms like Westside.com and Tata Neu contributed to about 5% of the firm’s revenue.

Source: Google Finance 

SIP back and relax!

The market volatility notwithstanding, it seems that the Indian investor will not be easily deterred from persisting with his SIP contributions.

Mutual fund inflows for July crossed the ₹23,000 crore mark for the first time. As per the Association of Mutual Funds in India, the monthly SIP contribution stood at a whopping ₹23,332 crore in July, 10% over the ₹21,262 crore recorded in June. 

The number of new SIPs registered in June also went up to 72,61,928, and the total SIP AUM expanded to ₹13.09 lakh crore in July from ₹12.43 lakh crore in June 2024. The total number of SIPs running also clocked in at 9.33 crore in July compared to 8.98 crore in June.

Equity mutual funds saw positive inflows for the 41st straight month from March 2021. Total inflows into growth and equity-oriented schemes stood at ₹37,113.39 crore.

Invest wisely 

A key part of investing is to be able to read the tea leaves of the economy. A distinctive feature of the modern economy is that it, invariably, experiences repeated boom and bust cycles. Now, that we are in a boom cycle, investors should heed the warning signals propping up on the financial or economic landscape. This is where the Appreciate app can be of great help to diligent investors. With our deep research capabilities and macroeconomic indicators, you will always be ahead of the market in decoding the market signals, and ensure that you stay one step ahead of the curve.

Warm regards,
Another week
in the markets