Sandip Sabharwal from asksandipsabharwal.com presents an interesting outlook. He believes that 2025 should be a reasonably good year overall. Currently, the consensus trade is long on the dollar and US equities, but the overweights are excessive. This typically leads to a reverse play, and emerging markets and currencies may perform better.

Auto Sector Insights

In the auto sector, among two-wheelers, TVS has outperformed expectations while Hero MotoCorp has not done as well. Maruti's numbers seem to be quite good as they corrected inventory delays and are back to normal. This shows positive trends from TVS and Maruti.

TVS's Success

TVS has shown remarkable performance in the two-wheeler segment. Its strategies and product offerings have resonated with consumers, leading to better-than-expected sales. The company has likely focused on innovation and meeting customer demands, which has given it a competitive edge. For instance, they might have introduced new models with advanced features or improved after-sales service. This has not only attracted new customers but also retained existing ones, resulting in increased market share.

Maruti's Resilience

Maruti's ability to correct inventory delays and return to normal operations is a significant achievement. Their management team's proactive approach in addressing issues has paid off. They have likely optimized their production and supply chain processes to ensure a smooth flow of vehicles. This has allowed them to meet customer demands promptly and gain a competitive advantage. Moreover, their focus on premium segments has paid dividends, with higher premium segments showing better growth. This indicates a shift in consumer preferences towards more premium products, and Maruti has been able to capitalize on this trend.

GDP and Consumption Analysis

GDP data is backward-looking as company reports have already come in. The second-quarter results were disappointing, reflecting a growth slowdown. RBI's high growth forecast seemed improbable. However, the second half is expected to be better due to festive and marriage season demand, as well as better agri product pricing. Urban consumption may remain stressed due to rising inflation and stagnant incomes. But overall, the second half is likely to be better than the first half. Monetary and fiscal policies are not very supportive of growth at this stage, and it remains to be seen if the economy can break out of the 6.5-7% growth rate.

HUL's Growth Strategy

HUL is aiming to enter high growth areas such as premium face care and beauty care. They recognize the need to accelerate growth in these areas to sustain long-term growth. To achieve this, they need to focus on innovation and differentiation. For example, they might invest in research and development to develop new products or enhance existing ones. They also need to improve their marketing and distribution strategies to reach a wider customer base. This shift in strategy shows HUL's awareness of the competitive landscape and their determination to stay ahead.

HDFC Bank's Cycle

HDFC Bank has gone through a cycle of merger excesses, balance sheet contraction, and now growth. Once they stabilize their credit deposit ratio, they can focus on growth. Asset quality remains strong, and they are benefiting from other banks facing NPA issues. This has led to a flight towards quality, and HDFC Bank is in a favorable position. However, whether it will outperform other banks or NBFCs depends on the monetary policy stance. An easing monetary policy is typically more beneficial for smaller financers, and it remains to be seen how this will impact HDFC Bank's performance.

Auto Sales in November

November dispatches post the festive season show mixed results. October dispatches are typically sold during the festive season. TVS has done better than expected, while Hero MotoCorp has performed less well due to its inventory management issues. Maruti's numbers are good, with a 10-11% growth in higher premium segments. This indicates that different players in the auto sector are facing varying challenges and opportunities.

Global stock markets witnessed a temporary pause on Wednesday as traders adjusted their positions ahead of the month's end. Concerns over potential U.S. tariffs under Donald Trump's return to the White House led to some profit-taking. The safe-haven Japanese yen continued its strong performance, reaching a five-week high against the U.S. dollar, which was weighed down by declining Treasury yields.

Thinner Trading and Holiday Impact

This week, trading across markets has been thinner than usual. November trading is coming to a close before the U.S. Thanksgiving holiday on Thursday, and many investors are extending their break into Friday. This has influenced market dynamics and added an element of uncertainty.

Stock Market Movements

Futures pointed to a slightly lower start for the S&P 500 ahead of a key consumer spending report. The pan-European STOXX 600 lost 0.4%, while MSCI's broadest index of Asia-Pacific shares initially faced losses but later recouped some ground to edge 0.1% higher. Asian stocks lost their footing due to fears over Trump's tariff pledges, with equities in Japan, Taiwan, and South Korea leading the losses.Trading in individual stocks was also affected. Trump's announcement of a 25% tariff on all products from Mexico and Canada and an additional 10% tariff on goods from China in January drew warnings of retaliation. This has created a volatile trading environment.

Impact on Bond Markets

U.S. bond markets have shown some signs of optimism this week with Trump's nomination of Scott Bessent as U.S. Treasury secretary. This has sparked hopes of reining in the government debt load. However, the overall economic and policy uncertainties continue to influence bond market sentiment.Samy Chaar, chief economist at Lombard Odier, noted that it is challenging to make sense of the very volatile communication. On one hand, there is aggressive and uncompromising news on tariffs, but on the other hand, there is a relatively pragmatic pick for Treasury secretary.

Currency Fluctuations

The U.S. dollar dropped against other major rivals. It fell 0.6% to $1.0547 per euro and eased by a similar measure to $1.26446 against sterling. It also slid 1.1% to 151.390 yen. These currency movements reflect the global economic and trade uncertainties.The New Zealand dollar rebounded 0.9% to $0.5887 from multi-month lows after the country's central bank cut interest rates by 50 basis points. This decision disappointed some in the market who had expected a larger reduction.

Cryptocurrency and Gold

The largest cryptocurrency bitcoin attempted to stabilize after a four-day retreat from a record high of $99,830. It was last up 2.5% at $93,889. Gold also showed some strength, ticking up 0.8% to about $2,648 per ounce.

Oil Prices and OPEC+ Meeting

Oil prices held steady on Wednesday as markets evaluated the ceasefire agreement between Israel and Hezbollah. There is also anticipation for Sunday's OPEC+ meeting, where the group could delay a planned increase in oil output. Both Brent crude futures and U.S. West Texas Intermediate crude saw some fluctuations. Brent crude futures rose 0.52% to $73.19 a barrel, and U.S. West Texas Intermediate crude was up 0.57% at $69.16. Both benchmarks settled lower on Tuesday due to the Israel-Hezbollah ceasefire deal.Overall, the global economic and trade landscape remains complex, with various factors influencing different markets and asset classes. Traders and investors are closely watching these developments and adjusting their strategies accordingly.