In today’s briefing:
- Trump Has Already Lost His Trade War
- Ohayo Japan | Stocks Close in the Green
- Charted Insights: A Structural Shift; The Rise of Midcap and Small-Cap Allocations in India
- Japan Morning Connection: Tech Shrugging off Megacap Weakness as Quantum Shines
- Australia Banks – Insolvencies Data Published 17 March Suggests Far Worse Credit Metrics
- China Consumption Plan: How Special Is This “Special Plan”?
- India’s Space Ambitions and the Satellite Internet Revolution
- Vedanta (VEDL IN) Set for Major Margin Expansion
- Biopharma Week in Review – March 17, 2025
- Furniture/Furnishings Weekly – Consumer Spending Slowdown
Trump Has Already Lost His Trade War
- Flawed economic theory, poor execution, and fatal over-reach have crippled Trump’s chances of winning a Trade War before it even started.
- Even with sound execution, the thought leaders behind Trump’s policy had predicted only a narrow path to success. Trump’s promises that it would be easy will backfire.
- Historical precedents show tariffs can lead to massive political losses, and trading partners are exploiting this weakness in the U.S. position adroitly.
Ohayo Japan | Stocks Close in the Green
- US stocks rebounded Monday, with the S&P 500 gaining 0.6%, the Dow Jones Industrial Average rising over 350 points, and the Nasdaq Composite up 0.3%
- Berkshire Hathaway increased its holdings in five Japanese trading houses to nearly 10%, fulfilling Buffett’s pledge to gradually raise stakes.
- NTT will invest 220 billion yen in its Indian operations from FY2025 to FY27, primarily in data centers
Charted Insights: A Structural Shift; The Rise of Midcap and Small-Cap Allocations in India
- India’s equity market has witnessed a noticeable shift in portfolio allocations, both among institutional and retail investors.
- The traditional concentration in Nifty50 and top-decile large-cap companies is gradually increasing exposure toward midcap and small-cap stocks.
- While this transition increases market depth and breadth, it also introduces new challenges around volatility and liquidity management, especially in sharp corrections.
Japan Morning Connection: Tech Shrugging off Megacap Weakness as Quantum Shines
- AI back in focus with NVDA’s Jensen set to deliver his keynote tomorrow.
- Intel jumping with the new CEO looking to shake up its AI lineup and further trim the fat.
- Buffet increasing stakes in the Trading Houses extremely well flagged so don’t expect much surprise.
Australia Banks – Insolvencies Data Published 17 March Suggests Far Worse Credit Metrics
- Newly released data on insolvencies in Australia suggests that bank credit metrics will come under pressure in current interim and possibly beyond
- Construction insolvencies were highest and rose 25% YoY, accommodations and food services accelerated sharply rising 59% YoY, and next leading figure, also accelerated
- CBA saw its NPL ratio rise from Dec 23 to Dec 24, and WBC released its 1Q25 to Dec 24 showing improving credit metrics. This may reverse.
China Consumption Plan: How Special Is This “Special Plan”?
- One key element was the linking of consumption to the wealth effect
- Continuation of targeted support for certain vulnerable sections of society
- Tactical changes as well as structural ones to support consumption longer-term
India’s Space Ambitions and the Satellite Internet Revolution
- Jio and Airtel have partnered with SpaceX’s Starlink to bring satellite internet to India, aiming to bridge connectivity gaps in rural and remote regions.
- This marks a turning point for India’s digital infrastructure: LEO satellites offer low-latency, high-speed internet without ground cables, transforming access for 500+ million unconnected Indians.
- India’s digital future is no longer limited by terrain. With ISRO enabling private space manufacturing, expect satellite broadband to become a mainstream connectivity solution, not just a niche experiment.
Vedanta (VEDL IN) Set for Major Margin Expansion
- Alumina’s wild swings have turned favourably for Vedanta Ltd (VEDL IN) . Aluminium constituted about 40% 9MFY25 EBITDA and could see significant near-term margin expansion.
- Alcoa (AA US)‘s over-reliance on external alumina sales implies it could face significant margin contraction in the near-term.
- Valuation: Both VEDL and AA trade at about 10x fwd consensus earnings. VEDL also has >10% dividend yield in recent years making it a far attractive bet.
Biopharma Week in Review – March 17, 2025
- Trump’s pick for CDC director, former Congressman Dave Weldon, had his nomination withdrawn just hours before the Senate committee hearing.
- Weldon lacked sufficient support from Republicans to clear the committee, as he adhered to his anti-vaccine views more strongly than RFK Jr.
- While vaccine makers (PFE, MRNA, BNTX, NVAX) rebounded briefly on the news, other federal actions kept the space under pressure, including the termination of NIH grants for research on vaccine hesitancy and uptake.
Furniture/Furnishings Weekly – Consumer Spending Slowdown
- Consumer discretionary stocks hard hit in recent market action (Figure 1) as economic and policy/tariff uncertainty continue.
- The WTR Commercial/Contract Furniture Index (- 3.7%), Residential Manufacturers & Suppliers Index (-1.2%), and Home Goods Retailers Index (-7.4%) all trailed the broader market indexes last week.
- Consumer spending is trending down across all income levels as recession fears increase (1).
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