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The title is borrowed from a JPMorgan note, but it's a fitting one for the first note of 2025. Because it promises to be a year which is clouded, with outcomes hinging on central banking policy outcomes predominantly, aside of Donald Trump. Needless to say, what Donald Trump does may led to inflation or otherwise, and will impact central banking policy and eventually markets. Auto sales though, didn't need any fog lamps, as a lot of the companies came with much better numbers than anticipated. As did primary market activity. If one thought that markets were the only way to earn big money, artists showed that concerts raked in moolah as well. And investors or punters in US natural gas showed that what people can dream of earning in a year, they can do it in a day. Here are the top talking points this week:
The title is borrowed from a JPMorgan note, but it's a fitting one for the first note of 2025. Because it promises to be a year which is clouded, with outcomes hinging on central banking policy outcomes predominantly, aside of Donald Trump. Needless to say, what Donald Trump does may led to inflation or otherwise, and will impact central banking policy and eventually markets. Auto sales though, didn't need any fog lamps, as a lot of the companies came with much better numbers than anticipated. As did primary market activity. If one thought that markets were the only way to earn big money, artists showed that concerts raked in moolah as well. And investors or punters in US natural gas showed that what people can dream of earning in a year, they can do it in a day. Here are the top talking points this week:
Storming Surge
US natural gas prices rose 18% as models show a brutal January cold snap. Several models are converging around cold weather in the eastern half of the US in the second week of January. The peak of the cold looks to be around Jan. 12 but some of the modelling has an extended period of cold. If it unfolds, there will surely be record US natural gas demand. Additionally, European natural gas futures climbed the highest since October 2023 after Russian gas flows to Europe via Ukraine stopped on New Year's Day. European gas inventories have been depleted at the fastest pace since 2021, sitting at around 75% due to the particularly cold weather in Europe over the past weeks. Needless to say, there could be macro impacts as well of such surges. Higher natural gas prices feed into headline inflation while some would also expect the cold to dampen US consumer spending. Even oil prices rose as colder-than-normal weather forecast drove natural gas futures up 20%, the most since the contract started trading in 2012. Gas tightness could stimulate short-term oil consumption amid an otherwise tepid demand outlook.
No Fogging Of The Glass Here
The auto industry ended 2024 on a relatively strong note. While the overall growth momentum moderated, there were quite a few positives across segments. Car sales in India rose for the third consecutive month in December, closing the year at a record 4.3 million vehicles. Maruti Suzuki and Tata Motors saw significant growth. Festive season demand and new launches helped boost sales. Two-wheeler sales were mixed, with Eicher showing a 25% growth, much higher than expected, and the market duly rewarding it. Emkay believes that the steep correction of 24% in two-wheeler stocks from the recent peak in 2024 is unwarranted because outlook on exports is improving and poised for sharp recovery, as bulk of the macro challenges in the highly under-penetrated key African markets, like Nigeria, are now largely behind and Latin America is seeing sustained growth. In the tractor segment, wholesales grew by around 14% year-on-year for December (Q3FY25 growth was 13%), and registrations remained strong with a 24% year-on-year growth in December.
Indian Equities Inched Higher
The index activity may be on muted volumes, but it had its fair share of volatility, and the upticks were decent. Newsflow around Morbi Ceramic Association proposing a one-month shutdown from Jan. 15 to Feb. 15, to offset the impact of weak environment, or a promoter selling off his entire stake in an entity at a rock-bottom valuation (read Ease My Trip) were big newsmakers, alongside the auto sales and quarterly business updates. A small but interesting announcement was Jai Corp selling a large parcel of its land holding to Reliance Industries at a 'pittance', and the markets punishing the stock viciously. And while auto sales dominated newsflow, there was considerable gain in the energy stocks as well.
Concerts Have Clear Skies!
Taylor Swift's 18-month Eras tour came to an end. It sold 10 million tickets for 149 shows. Tour revenues: $2.1 billion! This is the most for a concert series. Coldplay's Music of the Spheres concerts (numbered 177) have raked in $1 billion. In India too, while everyone was talking of how expensive the Diljit concert was, Arijit Singh's Mumbai concert tickets are priced higher than Diljit Dosanjh's concert, with the most expensive sold out for Rs 95,000. Whether its Nostalgia Acts, because many popular artists from previous decades are touring again, attracting older fans and introducing them to a new generation, or it is a wider range of music genres and artists are touring, catering to diverse audiences, concerts are a rage. And Taylor Swift is the reigning champion of the world.
One American newspaper reported that American businesses no longer see China as the land of opportunity, because the promise of China’s market has faded as its once-booming economy hits trouble. Newsflow emanating out of China will be the biggest watched item next week, both on the economy front as well as on the front of any health related scare that some quarters of social media are talking about. All of this — before the results season kicks in India. Watch out for an intensely news heavy month ahead.
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