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That's really the setup. Let's pull up our own gift nifty. There you go. The implied open on your screen. A marginal uptake on the back of the move that we saw yesterday. Mind you, very range boundary of trade yesterday. But let's stick with global for for just a few minutes. Let me bring on board Ed Yadeni of Yadeni Research uh this morning to give us a perspective as to how he's seeing uh the moves.
Uh Ed, it's great having you and give us a perspective. Uh let's first talk about the US 10-year bond and we was and even the 30-year for that matter following suit uh this flip-flop from uh 4.7 to 4.63 and now back to 4.7. How are you reading the moves at this point of time? Well, I know a lot of people are getting very concerned.
Um, I'm not that concerned because I've been thinking since the beginning of the year that uh the 10-year Treasury bond yield would be rangebound between 4% and 5%. That's a quite quite a broad range, but I think on average we'll see it around 4 a.5%. So, we're really still very much in the range. Uh, I view bond yields as being back to normal.
This is where bond yields were before the great financial crisis. Uh the great abnormal environment was between the great financial crisis and the great virus crisis when the federal reserve basically rigged the bond market uh by keeping interest rates extremely low. So I think the bond markets to a large extent reflect a healthy economy.
So, I'm not particularly concerned, but then again, I have to be concerned because uh there's lots of uh chatter about this uh this issue. I I'm thinking that yes, we certainly have a deficit problem, but we've had it for a long time. Uh and I'm thinking that uh the Treasury actions here uh probably mean that they're going to be issuing more Treasury bills, which will also take some pressure off the bond market.
Ed, do you think the bigger concern is the way the Japanese 10-year paper is actually moving? I mean, these are levels last seen in 1996, and people are wondering now if the BOJ does hike by September, what happens then? Well, I think you bring up a very important point, a very good point, and that is we can't just focus on the US bond market.
The bond market has gone global. what what happens in Japan clearly has an impact on yields around around the world and uh you're quite right uh we've seen that that in response to weakening yen uh both the Japanese uh uh ministry of finance and the US Treasury got together and try to support the yen and clearly the US Treasury's uh involvement had to do with they just don't want the Japanese to have to sell Treasury bonds to support the yen.
So, I think that kind of got everybody rattled a few a week or so ago and now everybody's rattled over the fact that the Treasury debt has reached a nice round number, not so nice round number of $40 trillion. Uh but again, we've uh we've seen large deficits and lots of debt for quite some time w without getting up to uh bond yields that would uh hurt the US economy and I think that's still likely to be the case.
So Ed, I mean at a time when you've got the US long yields and the Japanese bond yields just pulling money away from each other, what should investors be doing? hide in cash, increase allocation to AI, buy production in gold. Um maybe all of the above. Uh you know, having a diversified portfolio in a a period of a lot of uncertainty is is a w is always a wise thing to do.
But uh I think we're still in a global bull market in stocks. I mean, we're we're near record highs uh of a of about a week or two ago in in most stock markets around the world. Uh so I I don't think that uh one has to panic here and and sell stock positions. Um I think bonds at these [snorts] levels are really quite attractive actually.
Uh and then with regards to gold, yeah, gold looks like it uh made a uh intermediate term base. It found a lot of lot of support at at 4,000. Looks like we got a lot of the the the fast money out of the gold market and now it looks as though it's doing better. And uh that's partly because of the concerns about the US uh deficit, about the possibility of uh still higher inflation.
But all in all, I think stocks, bonds, and gold uh still make sense in this kind of environment. Okay. And uh Ed, just uh last off uh how do you allocate and how do you see India in this uh and the impact of all of this on India? What's the view there? Yeah. Well, India had a really good bull market a couple years ago and it's been basically consolidating ever since.
It's still a relatively expensive market. Um but uh I think uh once uh the price of oil settles down and may maybe that's wishful thinking maybe it's not going to settle down but I I think it will settle down. I think uh uh everybody's scrambling to figure out how to get oil out of the uh Middle East particularly around the Persian Gulf countries out from other outlets.
And I think that's happening and will continue to happen. So I think the price of oil you let's remember there there was actually a bare market in the oil in oil from 2022 to to the beginning of the of uh this year. So there there was plenty of oil around and there still seems to be plenty around because you would have thought that oil prices would have gone a lot lot higher but I think India needs to uh for Indian stock India stock market to do better I think we need to see oil prices stabilize hopefully at a at a lower level.
I think there was some concerns that AI would be a serious disruption uh to India's IT industry which has a lot of consulting and software companies. Uh but I think that kind of concern will also uh ease off and we'll find that the technology area will will do better. Uh and then the financials I think uh should uh they've been good stocks over the years.
I think they'll they'll continue to be. Ed, so good having you on the show and getting in all that insight. Good speaking with you. Thank you.
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