JUNE – HALF YEAR GONE OR HALF YEAR LEFT?

about 21 days ago
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June holds all the promise of a Salman Khan movie though let’s hope its not a ‘Radhe’ which we get dumped with.

This is going to be an action packed 15-days. There is so much macro data coming in that we will be reeling, number crunching; really, how many numbers does one small brain keep track of - the GDP, fiscal deficit, IIP, CPI, not to mention the Sensex, Nifty and stock prices and over and above all these, the corona numbers too! And this is while we try to remember the various use-ids and passwords. Whew!

Well, coming back to the data, yesterday we were over and done with the Q4FY21 GDP and today the disappointing Manufacturing PMI. And now the calendar is marked in bright red for 4th June – The RBI meet. With inflation on a fast gallop and the economy in shambles, the RBI has a tough task on hand – should it keep track of the inflation or growth? In an ideal situation, if all things were good, the rising CPI would have been a cue for hiking rates but we are not living in an ideal world as of now. So, in all likelihood, RBI will maintain a status quo and we will need to watch out for the inflation and GDP targets – with the severity of the second wave, it needs to be seen whether or not RBI makes changes.

Then on 11th June, there is the IIP data for April and it would be an interesting number as that’s the time when most states had gone into a lockdown and Covid was getting truly vicious. April’20 was a complete shut down and this time, it’s been a partial shut down, sorry, lockdown. Thus it would be intriguing to see the impact.

14th June – we will have both the CPI as well as the WPI for May. We all know that inflation is headed northwards; lets see how we quantify that spiraling cost. Going ahead, rising costs is what companies will have to contend with. Already in Q4 earnings, we did see the impact creeping in and companies resorted to some cost saving methods and largely managed to keep the margins intact. We need to see how, in Q1FY22, companies will manage costs – whether they are able to pass it on to the consumers or take a hit on the margins?

On the international front, there is the ECB interest rate decision expected on 10th June and there too, like the rest of the world, it will be a status quo. The US Fed too has scheduled a meet on 16th June and well, US too needs to hike rates given the rising inflation but that seems unlikely now as the economy is just about starting to perk up.

China will announce its industrial production data on 16th June and to see this one country show a growth, while the rest of the world suffers, well, it tests one’s tolerance levels.

Not to forget, June will also mark the arrival of the monsoon. In pre-Covid days, we used to listen with bated breath what the IMD had to say and compare it with Skymet – prediction of a normal monsoon meant the markets would cheer. This time too, a normal monsoon has been predicted and that’s one less worry in these turbulent times. Markets as such on a cheer all the time.

Well, we all hope June is a month of good tidings and more than the economic numbers, we see corona numbers going down and down while vaccination numbers go up and up. Now that will be a reason to celebrate…

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