US stocks edge higher ahead of holiday, crude tumbles U.S. stocks resumed their uphill climb led by interest rate sensitive megacaps on Wednesday, while crude prices slid as investors digested economic data and the postponement of the OPEC+ meeting that was to take place this Sunday. All three major U.S. stock indexes were green ahead of the U.S. Thanksgiving holiday, with interest rate sensitive momentum stocks putting the tech-laden Nasdaq in the lead. A spate of economic data, including jobless claims, durable goods, and consumer sentiment, suggested that the economy is softening after about 20 months of policy tightening from the Federal Reserve, but remains resilient enough to potentially avoid recession. “People feel good going into the Thanksgiving holiday,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. “Consumer sentiment was up quite a bit, there’s an indication that consumer spending remains fairly strong going into the holiday shopping season.” Wall Street’s rally was modest but broad-based, with energy stocks the clear outlier, tumbling in tandem with crude prices after the OPEC+ group of oil producing nations postponed their scheduled Sunday meeting, raising questions about crude production cuts. “The delay of the meeting indicates differences of opinion regarding production cuts going forward,” Tuz added. “If everyone was on board there’d be no need to postpone the meeting.” The Dow Jones Industrial Average rose 150.12 points, or 0.43%, to 35,238.41, the S&P 500 gained 20.47 points, or 0.45%, to 4,558.66 and the Nasdaq Composite added 83.79 points, or 0.59%, to 14,283.77. European stocks touched a two-month high, led by real estate shares, while a gauge of euro zone volatility dipped to its lowest level since July. The pan-European STOXX 600 index rose 0.36% and MSCI’s gauge of stocks across the globe gained 0.11%. Emerging market stocks lost 0.57%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.53% lower, while Japan’s Nikkei rose 0.29%. Benchmark Treasury yields wobbled after fairly strong jobless claims data unsettled a market that expects the Fed to begin cutting interest rates as early as June 2024. Benchmark 10-year notes last fell 4/32 in price to yield 4.4314%, from 4.418% late on Tuesday. The 30-year bond last rose 9/32 in price to yield 4.5633%, from 4.58% late on Tuesday. The greenback rebounded from a 2-1/2 month low after minutes from the Federal Reserve’s most recent policy meeting suggested interest rates would remain restrictive for some time. The dollar index rose 0.56%, with the euro down 0.43% to $1.0862. The Japanese yen weakened 0.82% versus the greenback at 149.64 per dollar, while Sterling was last trading at $1.2456, down 0.65% on the day. U.S. crude fell 4.58% to $74.21 per barrel and Brent was last at $78.91, down 4.29% on the day. Gold prices dipped below the key $2,000 per ounce level as the dollar gained strength. Spot gold dropped 0.4% to $1,991.09 an ounce.
Logistics, good or bad, are driven by the states and the commerce ministry has a LEADS (Logistics Ease Across Different States) report, based on perceptions. The 2023 version was released in December. Since states are heterogenous, in the reporting, they are divided into four groups—coastal, landlocked, north-east, and UTs. States that do well are called achievers. Nomenclature matters. Thus, states that are middling aren’t called average. They are called fast movers. States that are sub-par are called aspirers. Let me highlight coastal states, since 75% of export cargo is estimated to originate from them. Among coastal states, ones that do well are Andhra Pradesh, Gujarat, Karnataka, and Tamil Nadu. The ones that lag are Goa, Odisha, and West Bengal. While India’s logistics performance may have improved over time, that’s not true of every state. Some have slipped. Most states have a state-level logistics policy, including Goa and Odisha. West Bengal, bottom of the pecking order in the coastal category, doesn’t have one. To quote from LEADS 2023, “Looking ahead, the State (West Bengal) could benefit from formulating a State Logistics Master Plan and State Logistics Policy to drive efficiency improvements and facilitate investments within the logistics sector and undertake consultation with the logistics stakeholders for educating and informing them about the initiatives State is undertaking for the development and improvement of logistics sector.”
Logistics has been talked about for a long time and India has also focused on improving performance. We are now getting some precise data on measurement and quantification. That helps.
Bibek Debroy, chairman, EAC-PM. Views are personal.