💼 During normal times, the correlation between the US market, known as the mother market, and other markets is high. But these are abnormal times when the normal correlation need not hold.
💼 The US market was rattled yesterday on news of potential Trump-Powell tensions impacting the independence of the Fed. Markets abhor this.
💼 Powell has made it clear that he will be going by incoming data and the evolving outlook, which are now negative for the US economy. 💼 He also ruled out the possibility of a ‘Fed Put’ in a recent interview with Raghuram Rajan. Therefore, disagreement between the president and the Fed chief is likely to linger, resulting in some action from the mercurial president which can lead to legal battles.
💼 This period of uncertainty is likely to witness EMs like India decoupling from the US market.
💼 Investors can focus on fundamentally sound stocks.
💼 Bank Nifty is likely to remain resilient.
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Posted on : 22 Apr 2025 9:30 AM
