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The week started with news of a 24-year-long regime being toppled in Syria, as well as the Biosecure Act missing from the key defense bill in the US. Last week's US jobs data left people believing that the Fed will cut rates. Separate data had shown that the US consumer sentiment hit the highest since April, while year-ahead inflation expectations had picked up.
Also, the November CPI on Wednesday showed an increase which was higher than expected, and thus makes the stage completely unpredictable.
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For me, the highlight was D Gukesh becoming the youngest world chess champion ever, after defeating Ding Liren of China in the final game of their match. The 18-year-old Grandmaster broke the record held by the Russian Garry Kasparov for nearly four decades. Welcome development, but certainly not a predictable outcome after the first few games of largely tightly held draws.
Here's a list of the top things on my mind this week:
US Is Always Unpredictable
US consumer prices rose at a faster annual pace in November, a reminder that inflation remains an issue both for households and policymakers. Whether this hot report curtails hopes for a December rate cut from the Fed remains to be seen. The other aspect of US unpredictability is what Donald Trump might say or do, and whether it is on X or on some other platform. This week, he posted on Truth Social, the following: "Any person or company investing ONE BILLION DOLLARS, OR MORE, in the United States of America, will receive fully expedited approvals and permits, including, but in no way limited to, all Environmental approvals. GET READY TO ROCK!!!"
What might be predictable, is Mr Trump keeping the world on its toes.
Is China Really Ready To Stimulate? Unpredictable.
The trade figures from China on Tuesday were uniformly weak, with the near-4% year-on-year slump in imports last month particularly alarming. That was significantly worse than the bleakest forecast in a Reuters survey of 21 economists of a 3% decline, and probably highlighted how brittle domestic demand in China is. Hence, the outcome of the annual economic planning conference, led by Xi Jinping, was important — and it called for proactive fiscal policy, as well as increasing the deficit and issuing more ultra-long bonds next year. It added that the meeting also affirmed plans for China to moderately loosen monetary policy, such as by lowering interest rates. Remember, readout from their Politburo's Monday meeting had use of 'moderately loose' monetary policy, which had not appeared since the depths of the global financial crisis in 2008. Metals didn't react that positively, and therefore the street may not necessarily take promises.
Road Construction Awards Are Turning Unpredictable
While road awarding was subdued in Q1FY25 due to the elections, it has gained traction with projects spanning 773km awarded in November (221km in November last year) by the NHAI and MoRTH combined. Construction at the combined level too rose YoY to 841km during the month. Current fiscal to date road capex at approximately Rs 1.5 lakh crore is down 12% on year. As per Nuvama, awarding remained tepid in FY24 owing to lack of approval for the revised cost of the Bharatmala project. The brokerage house suggests that the trend would sustain in FY25 and that intense competition for road projects remains a concern.
Bistro! or Bolt? Or?
From being predictively a higher growth market to turning a hyper competitive market, the food-tech space is buzzing with news, and launches. Zomato-owned Blinkit is foraying into the quick food delivery space with its new offering Bistro, aiming to compete with Zepto Cafe and Swiggy's Bolt. Bistro operates on a similar model to its competitors, offering a curated selection of snacks, beverages, and meals from strategically located kitchens. The app currently appears to be in pilot phase, with limited availability in certain areas of Gurugram. Whether the large players succeed in decimating the smaller competition, or do they burn money while they can and then don't remain a fad once the discounts go away, is a discussion for another day. But they are certainly trying to create a habit. And whether the cost-conscious Indian will change to this habit permanently, or not, is at best unpredictable.
There is unpredictability in policy action next week (FOMC outcome coming up), or in the BoJ decision too. Whether Team India beats Australia in the Gabba test is unpredictable as well. But the mother of it all will start from Jan. 20, and is something that all of us will look forward to — how Donald Trump keeps us all guessing and waiting.
It promises to be an interesting time.
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