Indian equity markets have reached an all-time high. Leading ADRs ICICI Bank (IBN), HDFC Bank (HDB, Infosys (INFY), and Wipro (WIT) have gained 11.4%, 11.3%, 17.1%, and 5.5%, respectively, in 2019 based on yesterday’s closing prices. The Indian currency was weak at the beginning of the year. However, it changed course in March and appreciated against the US dollar. A stronger currency is negative for India’s information technology sector, as leading companies get most of their revenues from overseas markets.
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The key driver behind the rise in Indian markets this year has been expectations that the current Narendra Modi led government will be voted back to power this year. Having said that, following pollsters could be risky. After all, pollsters never saw Brexit coming, nor did they expect Donald Trump to be elected as US president.
Secondly, from a macro perspective, Indian markets continue to show weakness. The Indian government missed its direct tax collection target in the last fiscal year, which ended on March 31. The current uptrend in equities has been fueled by higher inflows from foreign investors who seem to be expecting that pollsters would be right about election results.
Energy prices have risen to multi-month highs that complicate the situation for India (EPI) (INDA). The country relies on imports for most of its crude oil needs and would face difficulty in passing on higher prices to consumers amid the upcoming elections. The country’s fiscal deficit, which is already high, could rise further if energy prices stay strong.
Charlotte’s Web Holdings (CWBHF) released its fourth-quarter earnings last week and missed analysts’ estimates for both its top line as well as its bottom line.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Kimberly-Clark (KMB) stock has risen 20.5% this year, boosted by the company’s better-than-expected sales and earnings during its last reported quarter. However, its stock could stop climbing. Here's why.