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Source: Vikas Subhash Singh (X)

The naval arm of Iran’s Revolutionary Guard Corps (IRGC) says two oil tankers have been abandoned in the Strait of Hormuz after striking naval mines overnight, Iran’s Tasnim agency reports. The IRGC Navy said the vessels had their navigation and identification systems switched off and were transiting through Hormuz under the cover of US fighter jets when they hit mines and “suffered a massive explosion”. “They are now burning heavily and have been abandoned,” the IRGC said.

Source: Desiree Fixler (X)

The chart below shows the terminal rate, ie the maximum implied rate from the strip of SOFR futures, is about 50 bps below the LW estimate of neutral. This gap is similar to other estimates based on market-observed proxies for the neutral rate.

A 50 bps hike would likely take the terminal rate about that much higher too, taking rates back to being restrictive for the first time since early 2025. That's likely what's needed to wipe out persistently elevated inflation.

In the long run, there are four trends that are serving as macro trends for India.

→ The biggest trend is that India’s rupee has become cheap, and therefore its precision engineering goods exports to sectors like aerospace, power equipment, and auto parts seem like a long-term trend. The fact that companies are looking to diversify away from China supports this trend. India’s CDMO (contract drug manufacturing) exports are also likely to be supported by this trend.

→ The second trend that is visible is that consumption is shifting from offline to online. This was a metro trend, but it’s now becoming a metro plus small-town trend. Hence, the tech companies with the largest scale will benefit the most.

→ The third big theme is India’s capital markets trend. India’s economy is getting more K-shaped. People are getting wealthier. That wealth needs to be managed.

→ The fourth trend is semiconductor assembly. India is not at the stage of assembling something as advanced as an AI chip yet, but it will develop a lot of sensor chips and lower-grade chips (28 to 110 nanometres; AI chips are made at 3 nanometres). In the long run, that could add to India’s exports.

Most of the companies in these emerging sectors are in the mid- and small-cap space, not in the large-cap space. Hence, in the long run, it might be beneficial to find these opportunities in the mid- and small-cap space.

1. Battery electric vehicles reached 23% of the market, while the share rose to 32% when plug-in hybrids are included

2. The best-selling EVs were both from Tesla in the form of the Model Y and Model 3

3. BYD is the biggest manufacturer of electric vehicles globally

4. Asian manufacturers take up 18 of the top 20 selling electric cars globally.

5. European manufacturers do not have a vehicle in the top 20

Source: Abdul Al-Asaad (X)

An oil tanker has caught on fire in the eastern part of the Strait of Hormuz after hitting a naval mine in a “restricted area,” Iran’s army said in a statement carried by state media.

Source: Daily Chartbook (X)