Venkat's Weblog

What to expect.

James Caron, Morgan Stanley’s Co-Founder and Global head strategist spoke on Reuters Investment Outlook Summit and has reiterated some interesting points.
For one Fed. Rate would hold the interest rate before 2009. According to him the CPI might peak at 5% to 5.5% before reducing to 4.6% by the year end. Similarly the U.S Treasury yields could hit 4.75% with the current level of 4.10%.
source:-Reuters

It is a know fact that, Bernanke has reiterated his stand on inflation and is strongly opposed to any sort of policies that would lead to inflation. It is also widely believed that the Fed. might follow 75 basis point of tightening. Caron feels that we can look forward for a below the trend growth rate for the U.S though not a long spell of recession.

Failed Tests

I was both surprised and shocked to come across this article in 'New Scientists' December issue; this goes on to show that pre-flight tests needs to raise standards even in international level. It is reported that in March '05 an Air Transat Airbus A310 flying from varadera, cuba to Quebec city, passengers were put in danger when the carbon composite rudder was torn off. When the matter was referred to the Transportation Safety Board or TSB, they came to a conclusion that the material used was at flaw. As many 'aircraft' enthusiast know the gaps in such cases are known through a test called 'tapping' or TAP test where during tapping, the different pitch sound gives an idea of the damage. But in this case nothing was found to be wrong during the 'pre-flight' tests. Additional information show that Boeing and Airbus rely on the 'TAP' test. Boeing 787 and Airbus 350 (due in 2012) are made of the composite material.

Market that was!

31st December marks the last day of the year 2007. The market for the day was generally down but 'technology' seems to save the day, this is another reason why Nasdaq seems to score over S&P 500.
As we know in 2007, subprime hit a rangeof banks, mortgage lenders, bond insurers and home builders, as a result of which their shares have gone down by more than 50% and they have taken a major hit.
As a summary NASDAQ rose by 9.8%, S&P 500 gained around 3.5% for the year 2007
Investors had exercised a lot of caution even during the holiday season, and the caution only increased with the assasination of Pakistan's former Prime Minister Ms. Bhutto.
It is reported that Blackberry makers stocks skyrocketed 166% for the year when calucualted on split-adjusted basis.
Apple was a stock that was tracked by me and which had touched $200 targeted. Well the year as I had earlier reported was a year for social networking sites and since technology sector did not have much exposure to financials it seemed to make a decent year for the sector.
-Compiled from Reuters,News.com and a few of my own Interpretations

Stealth

The F-117A Nighthawk stealth aircraft, left many gaping mouth open-wide, when it was first unveiled for Public Viewing in 1980. Jonathan Skillings of CNET news has described the Aircraft in detail and its history in the coloumn titled "A brief History of the Stealth Aircraft'. Here are some of his observations and what I think about the aircraft.

The Stealth aircraft was used during the Cold War between U.S.A and (then) U.S.S.R
and was quite futuristic in its capabilities and in its desigs. Triangles and Trapezoids seems to be the major shapes for the design. Even now I feel that it is one of those things that can be described as majestic and commanding in looks and delivery. Well as of now the Stealth seems to be a feast to many eyes as it flies during the many Air Shows conducted in Mexico or Dubai.

'A Model ofthe F-117A Nighthawk stealth, this particular model has a special place on my Desktop'

It seems the designs were chosen such a way that it enabled the Aircraft to hide on the sky both physically and from the Radar's reach. The F-117A might be replaced by a more sophisticated and high end technology aircraft but nothing can take that 'impact' that it created and still creates among the Aircraft enthusiast. Due for retirement, the Aircraft still stands with all its regalness in the U.S Airforce.

Economy watch-U.S

This march did spell some good news to the U.S Economy, when the economy itself was in its rebound path from the recession that it had faced some time back. The unemployment rate did come down to 4.4% from the all time high of 4.5%, matching the trend that was prevelent in the May 1991. The payroll started increasing to 180,000 after a low of 113,000. With unemployment rate also low, this does spell a good awakening for the economy as such. Now with the unemployment rate low, increase in payrolls and betterment of wages, the Fed's might not increase the rate. This might trigger some positive reaction in the market. But of course the 'safe period' which the economy was going through has ended and is now not in a much stable position with inflation threatening to increase at any moment!

Oil Prices

When the story about the released Britain Navy soldiers started filtering in, the prices of crude oil had started its journey downwards. Crude oil inventories rose by 4.3 million barrels. last week. Gasoline inventories dropped by 5million barrels. Well let us hope that the situation is under control and no such political disturbances upset the prices again. Well all said and done these are factors which are outside our control and which have invariably affected the market. It is such vagaries that rule the market.

Market Talk

In the week that was, the market was not at its best.
There were many factors that pushed the market down especially S&P and Nasdaq. The reason was not due to one industry or factor, infact many reasons played spoil sport to the market.

One of the earliest contributor to this downfall was the Iran conflict due to which the crude oil price shot up(with the situation proving to be tense, not much hope on the oil price coming down). As far as real estate was concerned the Beazer home was under fire for alleged fraud practice. As far as the tech. market was concerned, DELL's confession towards accounting malpractice proved costly and the shares fell down to 22$. Ben's quote about 'non promising' trend in the market plunged the market further.

As far the news was concerned the market did take the plunge but it is not the 'Cannot help' situation help and positive news are awaited to turn the situation around.

MARKET WATCH

Variety is the spice of life, and this holds true in case of the U.S. Market also. In the recent weeks blue chip companies had mixed results. HP gained 1.8% after it had acquired Bristol Technology. IBM added 1.2% by seeling 3.5% after selling its stake to Lenovo Group. But surprisingly Microsoft had falled down by 1.9% because after Vista's release, the company recorded a fall in its share and not the other way round. On the whole the market had performeed badly with S&P making a downslide of 1.40points and the technology heavy NASDAQ had registered a downtrend of 5.28 points. The only market seeming to make a flurry is that of the Real Estate Market.

Cisco's presnce in India

John Chambers, CEO of CISCO was here to some groundwork, before some of his executives get transferred to India. As you all know, Cisco is now based in Bangalore. The fist executive to move here was Wim Elfrink, who wil retain his title of Sr. V.P of Customer Advocacy. Ten more executives will relocate from U.S and Europe to Bangalore including the V.P of finance and Human Resources. The reason why Mr. Chambers chose India :

a. Highly skilled work force

b. Supportive Government

c. Innovative Customers

d. World class partners who already have global presence

Guess the world's corporates are watching. India is now all geared up to welcome the MNC's of the world.

MARKET NEWS -U.S

Guess I have not been giving you people much news on the market, but as results have started coming in for the fourth quarter, let me produce the results, as well as some analysis.

For one, as the economy(U.S) is towards the end of the fourth quarte, the results seem good. S&P have recorded a 10% increase. The news is good as far as the basic materials and telecommunications are concerned, if anyone of you guys have plunged into the market, then you have made your mark. But the analysis is that the market would not look so promising towards the end of the year. The reduction of the crude oil prices by about 13% has helped the market to grow. But the greates t disappointments has come in the form of the Fed's(hey I guess ben must be facing lot of frowns) that is because, the interest rates do not seem or show any sign of reduction. Well to put it in layman's language, when the rates fall, borrowing becomes cheaper and more and more business men and houses can invest in the market. But looks like ben is not giving way for that, probably in fear of the increase in inflation rate (hey he has his own reasoning!). Analysis is that the U.S dollar might slip down in value when compared to other currencies in the later part of the year. Well I guess I would dedicate the next article on the Asian and South East Asian markets to see how they are faring.

Well that is the Analysis as of now folks, so make hay while the sun shines is the moral of the story