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Moneycontrol Pro Panorama | Who's afraid of the Fed's taper?

In today’s edition of Moneycontrol Pro Panorama: Zee’s screen test, Chart of the Day, the road to taper and lift-off, Evergrande and bad loans, and more

September 23, 2021 / 05:03 PM IST
Representative image

Representative image


Dear Reader,

The Panorama newsletter is sent to Moneycontrol Pro subscribers on market days. It offers easy access to stories published on Moneycontrol Pro and gives a little extra by setting out a context or an event or trend that investors should keep track of.

The suspense over the US Federal Reserve's (Fed) taper decision has finally been put to rest. The Fed reiterated that a taper of bond purchases will be taking place "soon" without giving any further details. That has been taken to mean the November meeting could see action on this front. But Fed chair Jerome Powell’s statement that a “lift-off in policy rates” is not on its radar for now, comforted equity markets. Dow and Nasdaq indices rose in spite of a hawkish tinge in the policy announcement.

What does this mean for investors and the US economy that is recovering from pandemic? There is the question of stubborn inflation, obstacles to growth from the pandemic and now China's Evergrande crisis is added to the mix. With valuations at elevated levels, should investors ignore these risks or change their strategy? Read for our research team's incisive take on the path investors should follow.

The market's cool reaction to the Fed's signal of a taper is not surprising, says this FT article (free to read for Pro subscribers) which lays out why ​no one fears a tapering of bond purchases any more. And it leaves you with a hint of what could go wrong -- "The market is complacent about the Fed; the Fed is complacent about inflation. Let’s hope both are right.​" Don't miss it.

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Another FT selection​ turns the spotlight on an increase in the number of Fed officials seeing an interest rate increase in 2022, which may be far away but nevertheless is a point investors should not be ignoring. Do read to know more.

Asian markets, too, were back in form today as fears of the spillover effect from Chinese realty firm Evergrande’s possible default eased. But that doesn’t mean the problem is behind us. While we are focussed on the aftermath of the crisis on financial markets and its various stakeholders such as banks and individual depositors, the root of the problems lies elsewhere, argues this piece in today's edition. The real problem is that the real investments are not yielding adequate returns to service the debt or liabilities used to create assets. When the problem is as big as Evergrande is, only two institutions have the stomach to rescue the troubled institution. Who are they? Read to find out. Also, cast a glance at this chart of the day on why China is right to crack down on speculation.

Investing insights from our research team:

Zee Entertainment: More upside, post the sharp rally?

M&M Finance recovers from lows. Is there more upside in store?

What else are we reading today?

The confusing position of the chairman emeritus

Sony-Zee deal a bonanza for Zee shareholders, but block deals before announcement need to be probed 

Will Joe Biden be bold enough to walk the talk on India-US ties?

'He is his own ecosystem': Inside Kunal Shah's unique angel investing frenzy

Technical Picks: Dr Lal Path LabsTorrent Pharma and Ashok Leyland (These are published every trading day before markets open and can be read on the app)
Vatsala Kamat

Moneycontrol Pro

 
Vatsala Kamat

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