November 2nd, 2023
2 min read

What’s in the News?

  • Credit card delinquencies have risen from the pandemic low of 1.6% to 2.8% for the quarter in the US. De- spite persistent inflation, it remains well below the peak of 6.8% seen during the 2008 crisis.
  • China’s economy has been showing signs of recovery with economists predicting a rise in Sep PMI from 49.9 to 50.2. Additionally, a technical rebound was seen as Hong Kong stocks PE fell to less than 10 times.


  • Investors will be keeping track of PCE data releasing today for cues on inflation.
  • Core PCE is expected to decelerate to 3.9% from 4.9% annually indicating inflation slowdown.
  • On the back of this, the 10Y treasury yield dropped to 4.5% after earlier peaking at 4.6%.

Deal Flows

  • The USD 69B acquisition of Activision Blizzard, has finally received (provisional) approval from the UK’s antitrust regulator.
  • As of now, Microsoft only needs to get the deal through the US FTC in order to consolidate itself into the king cloud gaming with major properties such Call of Duty and Overwatch in its arsenal.
  • In other good news for Microsoft, OpenAI the parent company of Chat GPT is looking at holding second- ary share sales at 90B valuation. Microsoft’s USD 13B investment in OpenAI at a 29B valuation has now indicatively risen to 40B.

India Corner

  • Even before its entry into the JPM EM bond index in mid 2024, India may see USD 10B inflows according to a report from ICICI. With passive inflows, 10Y yields in India could drop to 7% from 7.22% currently.
  • With the festive season around the corner, car sales in India are expected to reach record highs of 3.7 lakh cars sold in September alone representing a 3% growth MoM for the 3rd largest auto market.
  • Vedanta has announced spin off of 6 businesses by FY 2025 – Aim to boost valuations and help pay off its outstanding USD 5B debt obligations.

The Geopolitical Playing Field : World Oil

  • Saudi and Russia extended production cuts by 1.3M daily barrels till Dec.
    • With demand and supply imbalanced, we will likely see deficits until 2024.
    • In the last 2 years, the US SPR has released almost 300M barrels to bring down prices.
    • We do not expect OPEC to push their cuts much fur-

ther with 5M barrel per day in spare capacity

  • We expect Brent crude to be range bound between

$80-$85/bbl year end to meet Saudi’s fiscal spending.

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