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UBS Group AG is advising investors to short the Indian rupee and reduce stock holdings, citing a structural slowdown in India's $4 trillion economy. Key factors include declining credit growth, foreign direct investment, and export competitiveness, exacerbated by high US yields and significant market losses, with Indian stocks down nearly $500 billion this year. The rupee has reached record lows against the US dollar, making it Asia's worst-performing currency, while bond outflows are at their fastest since 2020.
UBS Group AG is advising investors to short the Indian rupee and reduce Indian equity holdings, citing a structural economic slowdown in India. Key factors include declining credit growth, foreign direct investment, and export competitiveness, exacerbated by potential high US yields post-Trump's inauguration. Indian equities have lost nearly USD 500 billion in market value, and the rupee has reached record lows against the dollar, while bond markets face significant capital outflows.
U.S. stocks rallied in early trade, with the S&P 500 and Nasdaq each gaining over 1%, attempting to end a five-session decline. The dollar slipped after a recent rally, despite a stronger-than-expected manufacturing survey, while U.S. Treasury yields stabilized. Global stocks saw a modest increase, but the dollar index fell 0.2%, reflecting mixed market sentiments.
Asian shares fell to a three-month low as investors awaited crucial U.S. inflation data, with the dollar reaching a two-year peak. The Bank of Japan's dovish stance and steady lending rates contributed to the yen's decline, while U.S. Treasury yields surged, reflecting market concerns over economic policy and geopolitical uncertainty.
The US economy is projected to maintain its exceptional status into 2025, bolstered by Trump's "America First" policies, which favor US equities through tax cuts and deregulation. However, potential challenges include a narrowing growth differential, inflation concerns affecting tariff policies, and high valuations, particularly in the tech sector. As fiscal support wanes and global economic conditions remain uncertain, vigilance is necessary to adapt to any shifts in market dynamics.
The US economy is projected to maintain its exceptional status into 2025, bolstered by Trump's "America First" policies, which favor US equities through tax cuts and deregulation. However, potential challenges include a diminishing growth advantage, inflation concerns affecting tariff policies, and high valuations, particularly in the tech sector. As fiscal support wanes and immigration slows, the sustainability of this outperformance may come into question.
The UBS Billionaire Ambitions Report 2024 reveals that billionaire wealth surged by 121% from 2015 to 2024, reaching $14 trillion, while the number of billionaires stabilized at around 2,682. North American billionaires saw significant growth, with their wealth increasing to $6.1 trillion, driven by advancements in industry and technology. In contrast, Chinese billionaire wealth has declined from a peak of $2.1 trillion to $1.8 trillion, reflecting a broader stagnation in global wealth creation since 2020.
U.S. stocks opened mixed as investors awaited key inflation data and a European Central Bank meeting. The dollar rose 0.2%, while oil prices fluctuated amid geopolitical tensions in Syria. Small business confidence reached a 3.5-year high, boosting market sentiment.
India's central bank has maintained the benchmark interest rate at 6.50% while revising its GDP growth forecast for fiscal year 2025 down to 6.6% from 7.2%. Rising inflation, which hit a 14-month high of 6.21%, and a slower-than-expected economic growth of 5.4% in the July to September period have complicated the RBI's efforts to balance growth and inflation. Despite calls for lower borrowing costs from government officials, the RBI chief has ruled out immediate rate cuts, citing risks to the economy and currency stability.
Billionaires' wealth has surged by 121% over the past decade, reaching $14 trillion in 2024, outpacing global stock market growth. The technology sector has been the primary driver, with its fortunes tripling, while real estate has lagged due to market corrections and rising interest rates. The number of billionaires increased from 1,757 to 2,682 during this period.
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