Moneycontrol Pro Panorama | Services sport a smile

(Representational image)

Dear Reader,

India’s services sector was in good form in May as the S&P Global India Services PMI index came in at 58.9, expanding at its strongest rate in 11 years. The full reopening of the economy has contributed to better demand, but if there’s a grouse then it’s on the inflation front, with businesses fearful that inflation could affect demand making them shy away from hiring. This will add to the economic data that the Monetary Policy Committee will look at next week when it meets to decide on the next round of tightening. What will be the MPC decision’s impact on stock markets? Read Ananya Roy’s take here.

Elevated oil prices will no doubt feature in the MPC's calculations. Yesterday’s OPEC+ meeting may have resulted in the cartel agreeing to increase its output by 6,48,000 barrels a day but that provided cold comfort to the market. China’s exit from lockdowns in its biggest cities has seen the market turn bullish on what that means for commodities, with oil and metals gaining strength. Oil prices have not reacted much to this gesture.

But the White House is happy with the Opec gesture and news reports say US President Joe Biden may visit Saudi Arabia for talks, which among other things could see more concrete increases in oil output. India will certainly hope that happens and cools down oil prices.

Global finance chieftains have been sending a chill down investors’ spines, not that they have been too exuberant in the first place. JP Morgan’s Jamie Dimon warned of a hurricane heading towards the US economy, propelled by inflation. Goldman Sachs’ John Waldron added his bit by saying the number of economic shocks to the system he is seeing is unprecedented in his career. If you needed one more cautionary voice to be convinced, then BlackRock’s Larry Fink too spoke about how he expects inflation to remain elevated for years due to supply shocks. That could mean monetary policy may also remain in inflation-fighting mode for years.

Talking about the US and recession, Ajay Bagga adds one more alphabet to the financial soup, writing in today’s edition about how an L-shaped market may lie ahead of us. He takes a peek into the history of recessions in the US and concludes that a soft landing may be very difficult to engineer. Why? Read to find out.

Some companies have stocked up well for the coming winter. Today’s FT selection is from the Lex column:  Tech sell-off: Record fundraising has given start-ups breathing space (free to read for Pro subscribers).

​Investing insights from our research team

Weekly Tactical Pick – Amber Enterprises

Matrimony: Rising subscriptions drive growth for this tech platform

Auto sales: Early signs of easing of supply constraints in May

What else are we reading?

Strategy Lab | Is the 9:30 straddle trade overrated?

It’s the season of plenty for recruiters as India Inc searchers for leaders

How about a preventive health plan for India’s MSMEs?

Supreme Court ruling lays down the law on pledge of dematerialised shares

Dream freight corridors need a wake-up call

Environment | Let’s focus on the carbon footprint of India’s buildings

And in, Personal Finance

Personal Finance: Laddering debt portfolio could cushion interest rate swing risks

Technical Picks: TCS, Guar seed, Power Finance, Grauer and Weil and Lodha (These are published every trading day before markets open and can be read on the app)

Ravi Ananthanarayanan Moneycontrol Pro