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Did you know that your high-speed <keyword id="6357247" type="General" weightage="20" keywordseo="Internet" source="Orion">internet</keyword> might be making you a bit, well… sluggish? According to new research, faster internet connections could actually be helping to drive up <keyword id="6364492" type="General" weightage="20" keywordseo="Obesity" source="Orion">obesity</keyword> rates in Australia. The study examined years of data from the Household, Income, and Labor Dynamics in Australia (HILDA) survey, tracking the expansion of high-speed internet across the country from 2006 to 2019. The result? The faster the internet, the more likely people are to gain weight. <h3 style="line-height:1.38;margin-top:14.0pt;margin-bottom:4.0pt;">Fast internet changing daily habits</h3>According to Dr. Klaus Ackermann from Monash Business School, the connection between fast internet and weight gain has to do with “sedentary behavior.” He explains, “Access to high-speed internet connection decreases the likelihood of individuals meeting the minimum physical activity recommendation proposed by the WHO. That is, individuals become more inactive and exhibit more sedentary behaviour.” Basically, with high-speed internet, we’re more likely to spend hours watching streaming shows or playing online games. And, as Dr. Ackermann says, “Sedentary behavior is induced by the need to stay connected online for longer hours, which leads to lower metabolic rates and contributes to obesity.” And that’s not all — the more we’re sitting around, the more we’re likely to snack. “This problem is elevated by the need to frequently consume snacks during computer usage, which increases the daily intake of calories that contribute to obesity,” Ackermann points out. <h3 style="line-height:1.38;margin-top:14.0pt;margin-bottom:4.0pt;">A growing (and costly) problem</h3>Beyond individual health, Australia’s obesity crisis is also creating a big economic issue. Obesity cost the country $11.8 billion in 2018, and that number is projected to reach an astonishing $87.7 billion by 2032. According to the study, a mere 1% increase in National Broadband Network adoption is linked with a jump in <keyword id="20107050" type="General" weightage="20" keywordseo="Body-Mass-Index" source="keywords">Body Mass Index</keyword> (BMI) of 1.57 kg/m² and a 6.6% increase in the prevalence of obesity. In simple terms, fast internet is allowing people to live slower lives—lives that involve a lot more sitting and a lot less moving. <h3 style="line-height:1.38;margin-top:14.0pt;margin-bottom:4.0pt;">Breaking the cycle</h3>So, what’s the solution? Dr. Ackermann suggests that we might need <keyword id="21876118" type="General" weightage="20" keywordseo="public-health-campaigns" source="keywords">public health campaigns</keyword> to remind people of the risks that come with endless screen time. “One avenue of suggestion could be creating awareness of the potential increase in <keyword id="23729054" type="General" weightage="20" keywordseo="sedentary-behavior" source="keywords">sedentary behavior</keyword> with internet access; this could motivate people to take breaks between screen time to reduce sedentary behavior and engage in physical activity to promote a healthier lifestyle,” he says. He adds that encouraging people to take breaks and do more physical activities might be key. “Such public health campaigns could encourage the need to physically engage in errands, if possible, as opposed to strictly accessing goods and services online,” Ackermann advises. High-speed internet may be part of modern life, but maybe it’s worth taking a step back now and then to get off the couch. As Dr. Ackermann puts it, “Public health campaigns that encourage short but vigorous physical activity… could be useful for individuals with busy lifestyles who may only have limited time.” The findings of this research have been published in Economics &amp; Human Biology.

The faster your internet, the more likely you are to be obese, a study has found

<keyword id="19894908" type="General" weightage="20" keywordseo="festive-season" source="keywords">Festive season</keyword> in India is in full swing and kickstarted with the first day of <keyword id="20023931" type="General" weightage="100" keywordseo="Navratri" source="keywords">Navratri</keyword> on Thursday (October 3). The day marks the onset of a nine-day long festival which people celebrate in their own ways. The festival of Navratri will end with <keyword id="20211589" type="General" weightage="20" keywordseo="Dussehra" source="keywords">Dussehra</keyword> or Vijayadashami on Saturday, October 12 this year. This will be followed by various other festivals such as Karwa Chauth, Dhanteras, Diwali, Bhai Dooj, Chhath Puja, and Tulsi Vivah. Each year, when people are in festive mode, the demand for <keyword id="21040964" type="General" weightage="20" keywordseo="Indian-goods" source="keywords">Indian goods</keyword> reaches its peak and drives business. And this year, economic activities in the country are set to get an even bigger boost. The Confederation of All India Traders (<keyword id="20143308" type="General" weightage="20" keywordseo="CAIT" source="keywords">CAIT</keyword>) is expecting a significant rise in <keyword id="20337020" type="General" weightage="20" keywordseo="retail-business" source="keywords">retail business</keyword> during the Navratri festival, projecting a 43% increase in sales over the next 10 days. A CNBC report says that according to CAIT, last year’s 10-day Navratri period saw a business of ₹35,000 crore. This year, the organisation expects an even bigger boost in <keyword id="19950652" type="General" weightage="20" keywordseo="economic-activity" source="keywords">economic activity</keyword> across India, with Delhi alone projected to contribute over ₹8,000 crore during the festive season. The festive period, which began with Ganesh Chaturthi and includes major celebrations like Diwali and Christmas, resulted in a cumulative business of ₹3.75 lakh crore last year, as per CAIT’s data. Praveen Khandelwal, CAIT’s Secretary General Emeritus and Member of Parliament from Chandni Chowk, pointed out that there is a growing trend among consumers to prefer Indian-made products, especially traditional clothing like sarees, lehengas, and kurtas. Additionally, small vendors selling flowers, lamps, incense sticks, and other festive decorations are also expected to see a boost in demand during this period.

Navratri 2024: Delhi might witness business of ₹8,000 crores this festive season, predicts CAIT

<ul class="summary-list"><li>Stocks can climb 13%-14% to climb in 2025, UBS said.</li><li>The bank is adding to the growing numbers of forecasts for a "no landing" of the US economy. </li></ul>The stock market is on track for another year of double-digit gains, according to UBS.Strategists at the bank made a bullish call for stocks in a note on Friday, predicting the S&amp;P 500 would reach 6,600 by the end of next year. That forecast implies around 13% upside from the benchmark index's current levels, and the rise will be fueled by a "<a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/us-economy-no-landing-stock-market-outlook-advice-inflation-recession-2024-10">no landing</a>" for the economy, the firm said. In that scenario, economic growth continues, the job market remains strong, while inflation and interest rates might remain slightly higher than markets had previously expected under a hard landing or a soft landing scenario. "[T]he bottom line is that the improved US macroeconomic outlook increases our degree of certainty about our positive view of equities. We have upgraded US equities to Attractive from neutral," strategists said in a note on Friday, pointing to data that suggested the economy was on a solid bedrock.The job market is proving resilient, despite tighter financial conditions and higher interest rates. The US added <a target="_blank" class="" href="https://www.businessinsider.com/september-jobs-report-unemployment-rate-nonfarm-payroll-growth-federal-reserve-2024-10#:~:text=The%20US%20economy%20saw%20way,the%20second%20straight%20monthly%20decline.">254,000 jobs in September</a>, way more than the expected 147,000, according to the Bureau of Labor Statistics. The jobless rate, meanwhile, remained near historic lows, with unemployment dipping to 4.1%. Economic activity also remains robust. Retail sales grew an above-expected 0.4% over the month of September, and GDP expanded <a target="_blank" class="" href="https://www.bea.gov/data/gdp/gross-domestic-product">3% year-over-year</a> in the second quarter. Inflation, meanwhile, is moving closer to the Fed's 2% target. Consumer prices grew 2.4% annually in September, while <a target="_blank" class="" href="https://www.bea.gov/news/2024/personal-income-and-outlays-august-2024">personal consumption expenditures</a> inflation, the Fed's preferred inflation measure, grew 2.2% year-over-year in August, its lowest reading since 2021.Cooling price growth sets the stage for the Fed to continue cutting interest rates, UBS said, which is bullish for stocks. Markets are pricing in a 72% chance the Fed will cut rates another 50 basis points by the end of year, according to the <a target="_blank" class="" href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">CME Fedwatch tool</a>.The strategists added that while investors may see some volatility ahead of the November election, it's unlikely to interrupt more positive market catalysts."The US presidential election is unlikely to derail positive fundamentals. We expect volatility to rise in the runup to the election as neither party holds a clear advantage in any of the key swing states that will decide the outcome. But the election is taking place against a backdrop of Fed rate cuts, US economic momentum, and supportive secular trends like artificial intelligence (AI)," the note added.Other forecasters have said a "<a target="_blank" class="" href="https://www.businessinsider.com/fed-interest-rate-cuts-outlook-economy-recession-no-landing-borrowing-2024-10#:~:text=The%20no%2Dlanding%20scenario%20%E2%80%94%20in,enough%20to%20provide%20meaningful%20relief.">no landing" is looking to be more likely</a>, given the underlying strength of the US economy. Still, the New York Fed sees a <a target="_blank" class="" href="https://www.newyorkfed.org/medialibrary/media/research/capital_markets/Prob_Rec.pdf">57% chance of the economy tipping into a downturn</a> by September 2025.

The economic 'no landing' could drive the S&P 500 to a 13% gain in 2025, UBS says

India’s Chief Economic Advisor (CEA), <keyword id="20690607" type="General" weightage="20" keywordseo="V-Anantha-Nageswaran" source="keywords">V Anantha Nageswaran</keyword>, remains optimistic about the nation’s economic prospects despite a slower-than-expected <keyword id="19972825" type="General" weightage="20" keywordseo="GDP-growth" source="keywords">GDP growth</keyword> in the second quarter of FY2024-25. Speaking at the Bharat @100 Summit hosted by Assocham, he said that the fundamental health of the economy remains robust, according to a report by aNI. Nageswaran highlighted several indicators demonstrating the economy’s resilience. “If you run through the checklist for the <keyword id="19948184" type="General" weightage="100" keywordseo="Indian-economy" source="keywords">Indian economy</keyword>, the health is pretty robust,” he noted, pointing to controlled levels of external debt as a share of GDP, declining non-performing assets in the banking system, and stable inflation trends. Although certain food items have caused inflationary spikes, their impact is limited within the overall consumer price index basket, he explained. The CEA praised the shift in fiscal expenditure priorities over the past seven years, with greater focus on capital investments rather than revenue spending. This reallocation, he suggested, has bolstered long-term economic stability and growth potential. India’s GDP growth for the July-September quarter was 5.4%, significantly below the Reserve Bank of India’s forecast of 7%. While this has sparked concerns among economists, Nageswaran urged against overreacting. Erratic monsoons and excessive rainfall disrupted economic activity in Q2, he explained, while global uncertainties and supply chain pressures further weighed on growth. Despite these challenges, he maintained confidence in the broader growth narrative, citing improvements in key economic metrics. For instance, India’s gross capital formation has risen from 27.3% of GDP in the second decade of the 2000s to 30.8% today. Private consumption remains steady, and exports—spanning both services and manufacturing—continue to perform well even amid challenging global conditions. Nageswaran also underscored India’s growing competitiveness in international trade. He noted that the nation’s total <keyword id="24325087" type="General" weightage="20" keywordseo="exports-as-a-percentage-of-GDP" source="keywords">exports as a percentage of GDP</keyword> now surpass China’s, showcasing its resilience and adaptability in a shifting global trade environment. However, he cautioned against reading too much into quarterly fluctuations, highlighting the impact of geopolitical developments such as trade restrictions from the US on critical minerals and rare earths, as well as policy shifts in China. These external factors, he suggested, are likely to persist and may continue influencing short-term economic trends. (with ANI inputs)

Indian economy is resilient despite Q2 challenges, says CEA Nageswaran

India's services sector showed robust expansion in October, per the <keyword id="22267674" type="General" weightage="20" keywordseo="HSBC-India-Services-PMI" source="keywords">HSBC India Services PMI</keyword> (Purchasing Managers' Index), which rose to 58.5 last month, up from September's ten-month low of 57.7. October's figures managed to exceed even the long-run PMI average of 54.1, largely on the back of a strong sales pipeline and elevated demand. Employment, or job creation in this sector accelerated to its fastest growth rate in 26 months. Anticipating solid, sustained demand in the near term, firms added new employees at the most rapid pace in over 2 years. October also saw <keyword id="23834175" type="General" weightage="20" keywordseo="input-costs-rise" source="keywords">input costs rise</keyword> at their fastest pace in 3 months, indicating renewed demand and economic activity in the country. The ISM Services PMI, an indicator of the economic health of the US, also exceeded expectations, reaching 56.0 compared to the forecasted 53.8, suggesting strong growth within the services sector. "During October, the Indian services sector experienced strong expansions in output and consumer demand, as well as job creation, which achieved a 26-month high," said Pranjul Bhandari, Chief India Economist at HSBC. The sector saw increased business activity across multiple fronts, with export sales showing significant growth and companies reporting stronger demand from international markets including Africa, Asia, the Americas, the Middle East, and the UK. However, industry experts remain cautiously optimistic about the sector's prospects. Suman Chowdhury, Chief Economist at Acuité Ratings &amp; Research, noted that while the October recovery is promising, several factors warrant careful monitoring. “The recovery in the PMI indices in October 2024 is promising for the second half of the fiscal after the dip in several high-frequency indicators in September 2024. Industrial and service activity has expectedly received a boost from the anticipated spike in consumption demand in Q3 FY25, driven by the festivities and the marriage season," she said. Chowdhury added that it will be crucial to monitor the sustainability of these PMI indices at these elevated levels, given the reported weakness in urban demand in Q2 as flagged by FMCG companies. She also noted that potential increases in wholesale and core retail inflation, combined with higher input costs and wage pressures, could delay expected interest rate cuts. RBI governor Shaktikanta Das also noted that inflation and CPI figures for October might be elevated, pushing ahead any chances of interest rate cuts in the near future. Acuité Ratings &amp; Research maintains its GDP growth forecast at 7.0% for FY25 while acknowledging the multiple downside risks that will require close observation in the coming months.

India's Services Index jumps to 58.5 in October as employment grows the fastest in 26 months

No one's going to sound an alarm, blast out a text message, or shoot you an email about it, but the US economy is undergoing a historic shift. We are leaving one long period of expansion — what economists refer to as a "supercycle" — and entering a very different one.Over the past 15 years, the economy has been characterized by weak demand and low interest rates — a decade-and-a-half hangover from the Great Recession. Now, experts tell me, that is coming to an end. The world has changed, and we are entering an era of higher growth, creeping inflation, and geopolitical instability that will reroute the flow of money around the world. A new era has arrived, but it's going to be bumpy.The good news is that this new era looks as if it will be unencumbered by some of the problems that put a ceiling on growth during the previous era. The most salient feature of the old period, economists say, was the risk of deflation — the possibility that a lack of demand would cause wages and prices to spiral downward, a trap that is <a target="_blank" href="https://www.businessinsider.com/inflation-economy-deflation-unemployment-job-market-recession-outlook-paul-krugman-2024-7">extremely difficult to escape</a>. In an effort to avoid that fate, policymakers in Washington pushed interest rates down to zero and encouraged <a target="_blank" href="https://www.businessinsider.com/softbank-crashing-investments-uber-wework-monopoly-failure-2019-11">all kinds</a> of <a target="_blank" href="https://www.businessinsider.com/charlatans-show-up-when-wall-street-stock-market-gets-weird-2021-3">risky</a> <a target="_blank" href="https://www.businessinsider.com/twilight-of-tech-gods-recession-stock-market-crash-silicon-valley-2022-5">behavior</a> <a target="_blank" href="https://www.businessinsider.com/bill-ackmans-big-pharma-trade-is-making-wall-street-a-super-awkward-place-2014-10">among</a> investors, businesses, and everyday consumers. Investors trying to reach their benchmarks "had to creep out on the risk spectrum," Josh Hirt, a senior economist at Vanguard, tells me. "Supercheap debt," he says, made it easy for businesses to "overexpand and overhire."The pro-risk environment had some earth-shifting consequences. Silicon Valley put the internet on our phones, China blew a massive bubble in its property market, and the world started investing in renewable energy. But low interest rates did little to boost demand, and the economy consistently grew slower than it did before the crash, never notching above 3% GDP growth. It was only after the massive government stimulus, spurred by the pandemic, that the economy reached escape velocity, pushing up wages and starting to grow at a healthy clip.Now, economists say, we're entering a supercycle that will be characterized by three sweeping forces. First, higher interest rates will reward savers, making it more expensive to take risks. Second, geopolitical and economic volatility will generate inflationary effects, reintroducing the specter of soaring prices. And third, industrial planning will be increasingly influenced by national-security concerns, altering supply chains across industries. How low interest rates wind up settling will establish a new gravitational pull in global markets, recalibrating the forces that determine where the economy is most likely to grow — and where investment is most likely to flow.The new supercycle "puts the economy in a completely new era," says Silas Myers, the CEO of Mar Vista Investments, which oversees $4 billion in assets. He warns that an entire generation of investors, lenders, and entrepreneurs have failed to embrace the "profound impact" that the new economic era will have on their businesses."We were in a time that was less demanding and more forgiving," Myers says. "But that time is ending."One of the clearest signs that a new economic supercycle has arrived is when the financial rules go topsy-turvy. The previous supercycle was ushered in when the Federal Reserve, in response to the destruction caused by the financial crisis, cut its benchmark interest rate to 0% — the first time the central bank went all the way to the bottom.The structural shift sent shockwaves throughout the world. Yields on Treasury bonds tanked, meaning investors had to start taking some serious risks if they wanted to make money. This new adventurism pushed stocks higher and higher. Capital went flying into China and other emerging markets in record amounts — some $1 trillion in 2010 alone. Venture capitalists sank billions into companies like Juicero and <a target="_blank" href="https://www.businessinsider.com/wework-adam-neumann-apartment-startup-investment-silicon-valley-vc-apocalypse-2022-8">WeWork</a> that had no viable plan to turn a profit. And with interest rates so low, companies could suddenly load up on debt: From 2007 to 2017, global nonfinancial corporate debt doubled, to $66 trillion. Until the pandemic hit, inflation and wage growth both remained below 3.9%. The world had changed. Now, with the arrival of a new supercycle, money managers are once again being forced to adapt to a changing set of economic realities. Normally, when the Fed hikes interest rates rapidly, the stock market tanks. But that's no longer true. From 2022 to 2024, as the benchmark federal funds rate shot up to 5.5% from 0.5%, the Nasdaq 100 and the S&amp;P 500 soared by 23% and 22%. Higher interest rates also failed to spur widespread layoffs or crater the economy. <a target="_blank" href="https://www.businessinsider.com/jobs-report-labor-market-hiring-layoffs-quits-recession-sahm-rule-2024-8">Unemployment has stayed below 4.3%</a>, and GDP growth has remained solid, <a target="_blank" href="https://www.businessinsider.com/gdp-gross-domestic-product-second-quarter-2024-us-economy-2024-7">defying fears of a recession</a>. In short, something has scrambled the natural interactions of the marketplace. It's as if you put your hand over a hot stove and your fingers turned ice cold.One explanation for the economy's topsy-turvy behavior is a change in what economists call the neutral interest rate — the optimal point for encouraging growth without triggering inflation. After the financial crisis in 2008, the economy was so weak that the neutral rate went to zero to encourage money to flow more freely. But now the market's weird nature may be signaling that the neutral rate has risen above the Fed's ideal target of 2%. That would explain why the Fed's higher rates are no longer putting the brakes on growth. Fueled by the post-pandemic government stimulus, the economy's baseline has shifted. Over at Vanguard, Hirt and his colleagues predict that the neutral rate will stay higher for the foreseeable future, eventually settling at about 3.5%."Even if we do dip below 3.5%, the Fed will be anchored at that higher rate," Hirt says. "If the economy were to experience weakness and we have to cut rates, we still don't think that means taking rates back to zero."Unless you're a boomer, you've probably never experienced a world with this high a neutral rate. It changes the nature of risk, which changes what people decide to do with money on micro and macro levels. If you can get a decent return parking your money in ultrasafe government debt, why risk investing it in a startup or stomach the stock market's volatility? This isn't to say no one will be out here taking risks with their cash — it will just flow in different directions. That's because consumers are in a better place now than they were in the era that emerged after the Great Recession.The economy is "an extraordinarily diverse and dynamic animal," Joe Quinlan, the chief market strategist at Bank of America, assured clients in a recent note. It's "a $28 trillion hydra-headed behemoth that beats to the tune of many different sectors." As the Fed's higher rates were putting a strain on rate-sensitive sectors like housing — which makes up 16% of the economy — Big Tech and travel-starved households were spending money fast and loose. The experience showed that overall consumption can continue to rise even when significant swaths of the economy are struggling.So what can we expect from the new economic supercycle? Like every cycle, it will have its upsides and downsides. Rising interest rates will make loans more expensive, forcing businesses to make more-thoughtful decisions about debt. But they'll also boost savings accounts and interest income. In addition, a faster-growing economy will tighten the labor market, empowering workers to continue to fight for a larger slice of the pie. Since 2019, the bottom 10% of earners have seen a wage increase of 13%.Shifting away from the "grow at all costs" mindset of the previous supercycle has also incentivized governments — especially in the developed world — to do more to police markets and protect consumers. Whether it's capping the price of drugs or enforcing antitrust rules more aggressively, polls suggest Americans want to see <a target="_blank" href="https://prospect.org/economy/2024-08-27-polling-voters-action-corporate-power/">more limits</a> on <a target="_blank" href="https://today.yougov.com/economy/articles/47798-most-americans-oppose-monopolies-and-support-antitrust-laws">corporate power</a> and <a target="_blank" href="https://www.pewresearch.org/short-reads/2021/07/20/56-of-americans-support-more-regulation-of-major-technology-companies/">more regulation</a> to safeguard citizens. For the first time in years, the Federal Trade Commission has begun going after pharmaceutical middlemen, opposing mergers between grocery giants, and taking big swings at Big Tech.The new supercycle will also have profound consequences worldwide, upending how and where money is most likely to flow. In China, the debt bubble that formed in the property sector during the previous cycle is sucking cash away from <a target="_blank" href="https://www.businessinsider.com/china-xi-jinping-stimulus-plan-wall-street-stock-market-economy-2024-9">businesses and households</a>, undermining China's bid to become the world's leading economic superpower. And with Europe growing more slowly than the US, foreign investors are steering more of their money to America. In the second quarter of this year, foreign investors owned $8.2 trillion worth of US Treasury bonds, up by 7.3% from a year earlier. Foreign investment is also soaring in US corporate bonds (up by 9.8%) and US equities (up by 23%). Quinlan says he expects the US economy to continue outperforming the rest of the world, given the fiscal and demographic challenges facing the European Union, Japan, and China. In an era of increasing instability, when former sources of growth are flailing, the United States is widely viewed as the safest place to find returns."Not lost on investors is the fact that the US economy remains among the most competitive, innovative, and resilient in the world," Quinlan wrote in a recent note to investors. "Aerospace or agriculture, energy or entertainment, transportation or technology, goods or services — pick any sector or activity, and there's a good chance the US leads the rest of the world. All of this has helped fuel demand among foreign investors for US securities of all stripes." America's economic diversification is also expected to give it a leg up in one of the most volatile features of the new era: trade conflict. The US and China are already battling for control over critical industries like <a target="_blank" href="https://www.businessinsider.com/china-xi-jiinping-future-tech-global-economy-semiconductors-military-failing-2022-9">semiconductors</a>, <a target="_blank" href="https://www.businessinsider.com/china-crushing-us-america-battle-energy-evs-batteries-tech-war-2023-5">batteries</a>, and <a target="_blank" href="https://www.businessinsider.com/china-xi-jinping-crush-tesla-elon-musk-american-ev-industry-2024-2">electric cars</a> — and the tit for tat will be especially costly for less diversified economies. Germany's dependence on manufacturing, for example, places its most essential industries on a collision course with China's ambitions. And while the United States is well positioned to weather the storm, that doesn't mean it won't be rough. The world has never faced a challenge like the skyrocketing flow of exports from China up and down the value chain. It's a dynamic that threatens to imbalance international trade by flooding the market with cheap goods of all kinds. <a target="_blank" href="https://www.businessinsider.com/china-shock-explainer-us-economy-trade-dumping-supply-glut-yellen-2024-4">China Shock 2.0</a> "will not go down easily," Quinlan tells me.For over a decade we have become accustomed to the economy working a certain way — if this, then that. As a new supercycle emerges, investors, businesses, and governments that structured themselves around the old model may experience acute shocks. To succeed in this unfamiliar new world, they'll have to adjust their expectations and find ways to harness the supercycle's opportunities. It's the economic equivalent of natural selection: As the economy evolves, those who adapt will be most likely to survive. The days of economic growth are back. The future belongs to those who can grow with it.<a target="_blank" rel="" href="https://www.businessinsider.com/author/linette-lopez">Linette Lopez</a> is a senior correspondent at Business Insider.

America is entering a new 'economic supercycle'

<ul class="summary-list"><li>ETF inflows have taken off in the last week or so, as have stocks.</li><li>Strategists, including BlackRock's Gargi Chaudhuri, are optimistic about the economy.</li></ul>Investors have <a target="_blank" href="https://www.businessinsider.com/how-to-invest-trump-win-election-stock-market-outlook-strategy-2024-11">poured money into the market</a> at an unprecedented pace since <a target="_blank" href="https://www.businessinsider.com/donald-trump-wins-presidential-election-race-2024-11">Donald Trump's victory</a>, though a veteran investment chief believes there's much more than politics at play.Inflows into exchange-traded funds (ETFs) have shattered the record set in 2021 with more than a month and a half to spare, according to asset management titan BlackRock. The world's largest ETF issuer recently noted that $77 billion went into ETFs in the week after the election, which had never happened before. That surge coincided with the S&amp;P 500's best week of 2024.Markets were especially euphoric <a target="_blank" href="https://www.businessinsider.com/stock-market-outlook-trump-president-economy-tariffs-trade-war-kelly-2024-11">immediately after election day</a>. An astounding $22.3 billion went into US ETFs last Wednesday, and BlackRock's uber-popular iShares Russell 2000 ETF (<a target="_blank" href="https://markets.businessinsider.com/etfs/ishares-russell-2000-etf-us4642876555">IWM</a>) had its most active day of trading and inflows since 2007 as small caps soared by 5.8%.However, BlackRock's Gargi Chaudhuri doesn't think President-elect Trump deserves all the credit for this astounding market rally. The chief investment and portfolio strategist, Americas noted in a recent interview that US stocks <a target="_blank" href="https://www.businessinsider.com/stock-market-rally-outlook-trump-win-investing-strategy-2025-page-2024-11">had several strong catalysts</a> before Trump's win."Obviously, there have been some pretty sharp movements over the course of the last week," Chaudhuri told Business Insider. "But even as we look back to the quarter before that or since the beginning of this year, I think there have been some very solid fundamentals that have underpinned this movement."Robust growth for the economy and corporate earnings are some of the most salient market drivers, as are lower interest rates and receding inflation, Chaudhuri said. End-of-year rallies are also very common, <a target="_blank" href="https://www.businessinsider.com/stock-market-outlook-history-yearend-rally-election-trump-harris-truist-2024-11">especially in strong years for the market</a>, as Truist recently remarked.Another convincing explanation for this recent market momentum is that investors had reduced risk as uncertainty mounted ahead of the election before quickly changing course when they got clarity on the path forward sooner and more decisively than anticipated."Investors bringing down their portfolio risk going into elections was perhaps one of the reasons that we have seen this pretty strong re-risking in markets, especially after we got the election results," Chaudhuri said.<h2 id="e1cf1135-8543-44c9-9cf9-a679564fb91f">Why softer economic readings are a red herring</h2>As the new year approaches, Chaudhuri is rather confident about the US economy, even though a few recent developments seem to have given the glass-half-empty camp some ammunition.GDP growth and job additions have slipped lately, though neither is a major cause for concern for Chaudhuri. The economy <a target="_blank" href="https://www.businessinsider.com/gdp-gross-domestic-product-third-quarter-economy-2024-10">didn't expand as much as expected in the third quarter</a>, but GDP still rose <a target="_blank" href="https://tradingeconomics.com/united-states/gdp-growth">at a healthy clip of 2.8%</a>. And a <a target="_blank" href="https://www.businessinsider.com/october-jobs-report-unemployment-rate-nonfarm-payroll-growth-federal-reserve-2024-11">weak October jobs figure</a> appears to be largely due to the severe weather events that disrupted thousands of workers.Besides, more modest growth is a sign that the economy isn't overheating, which is welcome news to the Federal Reserve in its quest to ease financial conditions without reviving inflation. Such moderations aren't giving Chaudhuri pause about the trajectory of the US economy."It would be very normal for us to continue to see a further normalization in the labor market, given how strong the economy has already been, how high rates are," Chaudhuri said.The investment chief added: "We haven't really seen that job destruction taking place quite yet. You're still seeing wages rising; you're not seeing layoffs pick up in a meaningful manner."Corporate earnings growth is arguably the most compelling reason to stick with US stocks following what's been another outstanding performance this year. Profits <a target="_blank" href="https://www.businessinsider.com/stock-market-rally-outlook-trump-win-investing-strategy-2025-page-2024-11">jumped about 7% in the third quarter</a>, which is well above the <a target="_blank" href="https://www.businessinsider.com/how-to-invest-q3-earnings-season-recession-risk-investing-strategy-2024-10">mid-single-digit figure that analysts were banking on</a>."One of the things that the equity market has done over and over again is continue to surprise us in terms of earnings growth," Chaudhuri said. "I think companies have continued to find very innovative ways to manage their expenses. They've found a way, especially given the spend on AI, the type of CapEx that's going into finding ways to make companies have more productivity."<h2 id="1bb5d4ad-c973-49dc-9ddc-4fb0e9f732a3">Where to invest in a rosy 2025</h2>Two sectors with abnormally strong earnings prospects are financials and industrials, Chaudhuri said. These economically sensitive groups enjoyed some of the larger post-election pops as <a target="_blank" href="https://www.businessinsider.com/how-to-invest-trump-win-election-stock-market-outlook-strategy-2024-11">Wall Street puts its chips on sectors that should benefit from a hot economy</a>.And although <a target="_blank" href="https://www.businessinsider.com/cheap-stocks-to-buy-strong-growth-market-outlook-garp-bmo-2024-10">smaller stocks have been on a heater</a>, Chaudhuri believes that large, undervalued companies are the better place to be, given their superior earnings setup."For a longer period of time, large cap is where we think the earnings growth is going to continue to be higher and better," Chaudhuri said.While earnings may not be under the microscope like they were when interest rates were at their peak, they're still top of mind for Chaudhuri. Larger stocks often have better earnings than their smaller peers, and the investment chief thinks that the cream will eventually rise to the top."This catch-up trade that's happening in small caps right now has a little bit of legs," Chaudhuri said. "I think that can continue, maybe 'til the end of this month or even the end of next month."Chaudhuri continued: "But for us to believe in sustained rallies in small caps, we would need to see earnings growth, and over 50% of the small-cap index still is not very profitable."

BlackRock's Gargi Chaudhuri shares how to invest as ETF inflows soar to records ahead of a promising 2025

<ul class="summary-list"><li>US stocks raced to record highs after the 2024 presidential election concluded.</li><li>Investors seem certain that President-elect Donald Trump's policies are best for stocks.</li></ul>Wall Street is in love with Donald Trump, as if there was ever any doubt.A robust, multi-year bull market rally for US stocks reached another gear after the businessman-turned-politician <a target="_blank" href="https://www.businessinsider.com/donald-trump-wins-presidential-election-race-2024-11">won the presidential election</a>. The S&amp;P 500 just topped 6,000 for the first time ever, and the tech-focused Nasdaq Composite is also in uncharted territory.Traders are convinced that the bulk of <a target="_blank" href="https://www.businessinsider.com/donald-trump-election-victory-impact-investments-costs-housing-taxes-childcare-2024-11">Trump's economic policies</a>, which include tax cuts and fewer government regulations, will create a business-friendly backdrop that drives stocks higher."Investor sentiment is pro-growth, pro-deregulation, and pro-markets," said David Bahnsen, the chief investment officer at The Bahnsen Group, in recent commentary sent to Business Insider.<h2 id="3e5bdf8a-fc97-4e3d-a950-f23703f0015e">'Animal spirits' have been unleashed</h2>While some are skeptical of the consensus view, <a target="_blank" href="https://www.businessinsider.com/stock-market-outlook-trump-president-economy-tariffs-trade-war-kelly-2024-11">including those who are terrified about tariffs</a>, it looks as if investors broadly are scrambling to add exposure to equities. A staggering $22 billion flowed into exchange-traded funds on Wednesday, which was more than four times higher than the previous record for the day after the US election, according to State Street Global Advisors.Markets may hate uncertainty even more than tax hikes, so it's possible that a Kamala Harris win also could have sparked a relief rally.But that might dismiss how ecstatic big-money investors are about another Trump term, given that the S&amp;P 500 rose over 50% from his victory in 2016 until shortly before the pandemic."Business animal spirits could be rekindled once again from Trump's pro-business approach, which could lead to a more robust capital expenditures and investment environment," said Jeff Schulze, the head of economic and market strategy at ClearBridge Investments, in commentary.That term, "<a target="_blank" href="https://www.investopedia.com/terms/a/animal-spirits.asp">animal spirits,</a>" was coined in the 1930s by famed economist John Maynard Keynes, who remarked that investors' decisions are often driven by intense emotions like greed and fear.Anthony Saglimbene, Ameriprise's chief market strategist, borrowed Keynes' famous phrase to make the same point as Schulze: investors may be euphoric for the foreseeable future."Animal spirits through year-end could push major averages higher as the overhang of the election is removed and investors look to put excess cash to work in stocks," Saglimbene said in commentary.<h2 id="648d2368-71e0-40ed-9ed5-95b7faf9578c">How to invest after Trump's win</h2>Although the US economy <a target="_blank" href="https://www.businessinsider.com/economy-outlook-tariffs-trump-trade-war-slowdown-jpmorgan-david-kelly-2024-10">looks healthy by most measures</a>, many market strategists are counting on an even bigger boom under Trump that <a target="_blank" href="https://www.businessinsider.com/stocks-to-buy-election-investing-strategy-2016-comparison-morgan-stanley-2024-11">would benefit economically sensitive stocks</a>."This broad 'risk-on' mood for the U.S. stock market is cutting across all sectors, but particularly favoring more cyclically sensitive sectors that would benefit from a re-strengthening of the economy and tailwinds to corporate profitability," said Jim Baird, the chief investment officer at Plante Moran Financial Advisors, in written commentary sent to BI.Sectors that are heavily reliant on economic growth, like energy and financials, will stay hot, said Sébastien Page, the head of global multi-asset at T. Rowe Price, in a recent interview."I don't think it's over the top," Page said of the postelection market rally.Several of the strategists and investment chiefs that Business Insider leaned on for this story also cited small caps as a top idea, provided that the economy stays strong and taxes fall."Enough people had been worried about, 'Could we have a credit cycle? Could we have an economic slowdown into next year? What would increases in taxes and regulation do?'" said Sean Gallagher, the global head of Lazard's small-cap equity platform, in an interview.He continued: "Now that's off the table. I think it just increases small-business optimism. I think it'll increase <a target="_blank" href="https://www.investopedia.com/terms/c/capitalexpenditure.asp">CapEx</a>, which has been kind of held back."Smaller companies performed admirably early on in Trump's first tenure, though <a target="_blank" href="https://www.businessinsider.com/cheap-stocks-to-buy-strong-growth-market-outlook-garp-bmo-2024-10">they've lagged large caps for years</a>. Gallagher is highly optimistic about the group again, both because of the economic environment and their valuations, which are <a target="_blank" href="https://www.businessinsider.com/stocks-to-buy-small-mid-caps-market-rotation-outlook-bmo-2024-10">startlingly cheap relative to their peers</a>.Schulze from ClearBridge is also aboard the cyclical and small caps train. The strategist is fired up about what Trump's penchant for lower taxes and limited regulations means for industrials, consumer discretionary stocks, and financials.Saglimbene from Ameriprise concurred again that "the backdrop for financials could improve, as less regulation and the potential for merger/acquisition and capital market activity accelerate."Add the technology sector to the list of winners from less governmental oversight, Bahnsen said. Tech companies seem like a clearer beneficiary since the Federal Trade Commission (FTC) should be less hostile to their interests.For all the optimism in markets, some strategists are branching out from stocks.Jim Thorne, who's the chief market strategist at Canada-based wealth management firm Wellington-Altus, said in commentary that he's most interested in gold and bitcoin, which some have referred to as the yellow metal's digital doppelgänger.The world is awash with cash, making scarce assets like gold and bitcoin more valuable, and Thorne also noted that global economic growth is slowing. That suggests that the path forward for risk assets may not be smooth — even if Trump is successful in his second term."Investors should brace for volatility and shifts in market leadership as we transition to a peacetime economy, shaped by Trump's policies," Thorne said in written commentary.

'Animal spirits': 7 market strategists share how to ride the red wave as US stocks surge to new records

<ul class="summary-list"><li>The S&amp;P 500 can add to record highs through year-end with Trump headed to the White House, Goldman says.</li><li>The end of political uncertainty will bring back investors and spark a post-election rally.</li></ul>With the presidential election wrapped up, Goldman Sachs anticipates that the stock market will keep moving higher.The S&amp;P 500, Dow Jones industrial average, and Nasdaq 100 all hit all-time highs on Wednesday after Donald Trump's presidential-election victory pleased investors anticipating his pro-business policies.According to analysts led by chief US equity strategist David Kostin, there are three reasons why the momentum will keep up:First, the drop in political uncertainty following a presidential race typically fuels robust year-end returns during election years.Historically, the S&amp;P has generated a median return of 4% between Election Day and the year's calendar end, Goldman said. If the same happens this time, that would push the benchmark index up to around 6015, reflecting a forward price-to-earnings multiple of 22x."Along with the resolution of election uncertainty, resilient recent economic growth data and continued Fed rate cuts support the healthy near-term outlook for US stocks," analysts wrote.However, the bank warned that a steep increase in Treasury yields could muddy any post-election rally.That could happen, as the 10-year rate has already climbed to more than 4.4% as anticipation of a Trump win mounted through October. Some consider this signal that bond traders are worried over the US fiscal trajectory under Trump, given that he has offered little policy solutions to the country's growing debt pile.On the other hand, Goldman notes that equities have dismissed the rise in yields as they have also climbed on signs of a stronger economy.Second, the stock market should move higher as investors reallocate into equities.According to Goldman, investors decreased equity exposure of the election, with hedge funds reducing both net and gross leverage across recent weeks. With uncertainty now headed lower, investors are likely to reposition into the market, boosting S&amp;P appreciation, the bank said.<div type="image" title="Chart showing hedge fund gross leverage in the market" height="1530" width="1754" msid="115029431" hostid="261" sizebytes="64810"></div>Finally, bolstered M&amp;A and IPO activity under Trump's administration will further support stock prices, Goldman speculates.Regulation that has come to challenge mergers in recent years will likely be relaxed under the president-elect, boosting business confidence and corporate cash spending, the bank said. An estimated $4 trillion in spending next year would be split between paying shareholders and investing in growth."Our cash M&amp;A model suggests activity will rebound by 20% in 2025 following a 15% decline this year," the bank said. "Solid economic and EPS growth, relatively loose financial conditions, and contained equity market volatility should support activity."

3 post-election reasons why stocks will rise into year-end, Goldman says

<ul class="summary-list"><li>Interest rates and stock returns are expected to decline, impacting investment strategies.</li><li>Historically, stocks and bonds have alternated in performance, affecting portfolio decisions.</li></ul>A diversified investing strategy means a split between stocks and <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/investing/what-is-a-bond">bonds</a>, at minimum. But for the better part of the last two decades, interest rates were near zero, and real returns in bonds were lacking.Still, investors added them to their portfolios because history has shown us that asset classes can zig and zag, with long <a target="_blank" class="" href="https://www.businessinsider.com/stock-and-bond-market-correlation-normal-2014-2">periods of stock market outperformance</a> relative to bonds and intervals where that dynamic flipped.The last two years were great for both asset classes. Elevated rates put the bond market back on investors' minds, while the <a target="_blank" class="" href="https://markets.businessinsider.com/index/s&amp;p_500">S&amp;P 500</a> had a solid 26% total return. But depending on who you ask, the future may not be as bright.Yields will be less attractive as the <a target="_blank" class="" href="https://www.businessinsider.com/interest-rate-cuts-federal-reserve-election-jerome-powell-inflation-jobs-2024-11#:~:text=The%20Fed%20cut%20interest%20rates,country%20recovered%20from%20the%20pandemic.">Fed begins its rate cuts</a> for this cycle. Meanwhile, Goldman Sachs expects stock-market returns to be muted for the coming decade. The S&amp;P 500 is predicted to see a mere 3% annualized return over the next 10 years, which could lag the 10-year Treasury at an expected 4% yield, according to a <a target="_blank" class="" href="https://www.businessinsider.com/how-to-beat-stock-market-returns-next-decade-goldman-sachs-2024-10">recent note</a> by the investment bank's chief US equity strategist David Kostin.If the bears are right, investors may be forced to take on more risk for returns. Sounds gloomy, but for bond traders like Mark Rieder, who has over two decades of experience in the sector, it could be an opportunity to dig for bargains in corporate credit.Generating alpha for a credit trader could mean beating a peer, a Bloomberg fixed income index that matches the category of bonds traded, or simply remaining in positive territory in terms of total returns when the market is down, Rieder told Business Insider."Over the past 10 years, when interest rates were very low, it was not an exciting time to be a credit analyst and a portfolio manager," Rieder said. "But it's much more interesting today, and I'm really excited about that."However, active debt investing takes a good level of skill and consistent effort to make the right credit selection, according to his new book, "Reminiscences of a Bond Operator." Like the stock-picking process, following the crowd or consensus won't result in alpha. A credit trader must conduct the same level of fundamental analysis and dig into a company's balance sheet, earnings calls, 10Qs, and 10Ks, among other things, to determine valuation."I've always believed that a good credit analyst is also a really good equity analyst because you really need to understand the capital structure of the companies that you're evaluating and all of their different needs," Rieder said. "Most companies want to have their stock price go up, and so as a credit analyst, you need to understand that so that you can understand what their motivations are."It's especially important now, as the credit space faces its own set of challenges. Like the <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/investing/are-we-in-a-recession">business cycle</a>, credit has its booms and busts based on macro conditions and supply and demand. In a strong economic environment, corporate cash flows rise, and companies increase borrowing with favorable lending terms. But when times are tight, companies deleverage until their debt is less than their cash flow. Once that equilibrium is satisfied, more borrowing ensues, according to his book.Rieder said credit is in the boom part of the cycle. This might sound surprising, considering debt has been expensive for the better part of the last two years. But most companies were locked into low yields before rates rose, he noted. As debt turnover increases, investors need to be cautious."There's a lag impact on the increase in rates. Most companies borrow for long periods of time, five years, 10 years," Rieder said. "A lot of companies issued debt when interest rates were very low. They're now only starting to refinance that low-coupon debt. That, in turn, is what causes an impact."He doesn't expect that the Fed's cutting cycle will mitigate the crunch. The central bank can impact front-end yields, but the back end is driven by additional considerations, he noted. The 10-year rose to 4.3% shortly after the first rate cut of September, a signal that <a target="_blank" class="" href="https://www.businessinsider.com/us-election-forecast-most-accurate-economist-predicts-outcome-economic-impact-2024-10">investors were looking ahead</a> at other economic risk factors, including concerns over the government's ballooning deficit, he added. Additionally, economic conditions such as elevated credit card debt pose concerns for future corporate profits.<h2 id="101d0bc7-10c7-46f9-a758-eea160588283">Trading credit</h2>Right now, investment-grade credit spreads are tight. The yields in corporate bonds aren't much higher than in government bonds, meaning less compensation for more risk. But if we move from the boom to the bust phase, credit spreads could widen, and that could create opportunities in the credit space, he said.While spreads are tight, he prefers front-end yield or pairing trades with cheap optionality. The cost of shorting a credit index like the CDX Investment Grade 5-Year Index, a credit-default-swap index that tracks the credit risk of large US investment-grade companies, is low. And since spreads are trading at historically tight levels, it's less likely to get much lower, which could limit potential losses, he said. This position can then be paired with a trade expected to perform positively.An example he provides of a market-neutral pair trade could look like buying a corporate bond in a sector with structural tailwinds, such as a natural gas producer set to benefit from increased demand and rising energy prices, or airplane lessors who benefit from higher lease rates due to a tight aircraft supply — a situation that's unlikely to ease in the near term because of production challenges faced by manufacturers. Then, take a short position in an interest-rate future to hedge against the bond's interest-rate risk."This trade works if natural gas prices remain stable or rise, leading the energy bond to outperform the overall corporate bond market," Rieder said. "It's an excellent opportunity to capitalize on the current tight credit spread conditions and complacency in the overall credit market."Having liquidity can also give you an upper hand. As spreads widen, investors may be forced into selling higher-quality credit because they can't offload the lower-quality ones, he said."There are huge opportunities in credit if you remain liquid during dislocations," Rieder said. "Other investors are going to be looking for liquidity. They can't sell what they want to, so they sell what they can, and that can lead to opportunities to buy cheap assets."

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