Arvind's Newsletter

My newsletter is back after a summer break

1.Underwhelming Earnings May Play Spoilsport For Indian Stocks' Record Rally

The Indian stock market may soon hit a speed bump following its recent record run as investors focus shifts from sentiments to fundamentals. Analysts believe that earnings are not keeping up with the stocks' rally, with most sectors showing a decline in their earnings upgrade.

The earnings revisions across the last two months have been a mere 0.6%, and the last month has seen a decline, Bernstein said in a recent note. Seven of the 13 sectors showed a decline in the previous three months, and the average of earnings revision is barely 1%, it noted. Furthermore, only 39% of the NSE Nifty 200 universe has seen earnings upgrades in the last three months, whereas 77% have seen positive price movements, according to the brokerage.

The scope for an earnings downgrade is increasing given that most of the drivers have already been played out, said Ganeshram Jayaraman, managing director and head of Avendus Spark Institutional Equities."On one hand, the big picture in India is quite good, but the multiples are quite expensive and can present earning challenges."

Read more at: https://www.ndtvprofit.com/markets/underwhelming-q1-earnings-may-play-spoilsport-for-indian-stocks-record-rally

2.Revival of the Left ? After UK , Shock win for left wing coalition in France

France faces political deadlock after a leftist alliance won a shock election victory, upending expectations that the far right would triumph. France’s left wing united to keep the far right from power. Its strategy appeared to work.

President Emmanuel Macron took a gamble calling the snap vote to defeat Marine Le Pen’s surging National Rally. His centrist party ultimately finished second behind the leftists, with Le Pen’s bloc third. Macron’s prime minister has offered to resign, although the President may still refuse. 

What happens now is unclear: The three main groups each control about a third of Parliament and are not fond of one another.

A coalition is one possibility , Le Monde reported, or a weak minority government in danger of a vote of no confidence. Alternatively, new elections may be called for next year.

3.And in USA, President Biden told congressional Democrats in a letter Monday that he was committed to “running this race to the end," as public and private calls for him to exit from the contest grow louder.

In the letter, Biden said he had had “extensive conversations" with party leadership, members and voters over the past 10 days and said he wasn’t blind to the concerns about his age and his candidacy that have emerged since his disastrous debate performance. But he said he was heartened by “rock-solid, steadfast support" from many and wouldn’t continue if he wasn’t confident he could beat former President Donald Trump.

A defiant Biden also argued that he had been made the nominee in the Democratic primary process and that to step aside would disenfranchise those voters. “How can we stand for Democracy in our nation, if we ignore it in our own party," he wrote. “I cannot do that. I will not do that."

4.How Isha Ambani’s Shein ambition may be set to disrupt fast fashion in India

Global fast fashion label Shein, Mukesh Ambani’s latest play in retail, is expected to disrupt the USD10 billion fast fashion market in India, a category that faces intense competition from domestic players like Myntra and Zudio on one hand, and global ones such as H&M and Zara on the other.

Shein, operated by Roadget Business Pte Ltd, which moved its headquarters from China to Singapore in 2022 for regulatory reasons, reported profits of more than USD2 billion in 2023 and close to USD45 billion in gross merchandise value. 

Fast fashion grew 30%-40% in the last fiscal, compared to the 6% growth experienced in the overall retail sector, according to a report by Redseer Strategy Consultants. The report has forecasted that fast fashion in India would contribute for 25-30% of the overall fashion retail landscape to cross USD50 billion in sales by FY31, and that it is set to see an influx of global brands and new homegrown ones.

Shein, which wants to reduce dependence on China, is looking at the partnership with Reliance Retail to tap the growing India opportunity, as well as scale up sourcing from India. The agreement between the two involves utilising India as a supply source for its global operations and building a network for local garment manufacturers to boost exports of textile from India.

5.Amazon at 30: what next for 'The Everything Company'?

Amazon turned 30. Jeff Bezos founded the company in 1994 as an online bookstore — now it offers streaming services, home camera systems, and tablets, and next-day delivery of almost any item. It also supports much of the internet’s infrastructure via its cloud-computing division.

It called itself The Everything Store, but “at this point, Amazon is sort of ‘The Everything Company’,” an analyst told the BBC: The company itself once joked the only way you could get through a day without making Amazon richer was by “living in a cave.” It has faced criticism over its treatment of staff and of its tax affairs, but the main question it must answer, another analyst said, is “What the heck is left?” 

6.AI scientist Ray Kurzweil: ‘We are going to expand intelligence a millionfold by 2045’
The American computer scientist and techno-optimist Ray Kurzweil is a long-serving authority on artificial intelligence (AI). His bestselling 2005 book, The Singularity Is Near, sparked imaginations with sci-fi like predictions that computers would reach human-level intelligence by 2029 and that we would merge with computers and become superhuman around 2045, which he called “the Singularity”.

Now, nearly 20 years on, Kurzweil, 76, has a sequel, The Singularity Is Nearer – and some of his predictions no longer seem so wacky. Kurzweil’s day job is principal researcher and AI visionary at Google. He spoke to the Observer in his personal capacity as an author, inventor and futurist. Read on.The Google futurist talks nanobots and avatars, deepfakes and elections – and why he is so optimistic about a future where we merge with computers.

7.How to Do Great Work: Paul Graham

Last year, Paul Graham, a renowned programmer, entrepreneur, and venture capitalist known for co-founding Y Combinator,  an essay titled "How to Do Great Work." He covered a wide range of topics, from choosing what to work on to cultivating originality. This week, Peter Schroeder's post has a terrific visual representation that maps out the main ideas from Graham's essay. Thanks to my close friend Ravi Trivedy for sharing this.

8.Good luck finding another Rahul Dravid

Karthik Krishnaswamy of ESPNCricinfo brings out in a subtle fashion, the numerous ways in which Rahul Dravid has contributed to the success of this team without ever being in the limelight. Read on

9.People can move this bionic leg just by thinking about it

A mind-controlled prosthetic feels more like a part of the wearer’s body and promises to make walking easier, reports MIT Technology Review.

When someone loses part of a leg, a prosthetic can make it easier to get around. But most prosthetics are static, cumbersome, and hard to move. A new neural interface connects a bionic limb to nerve endings in the thigh, allowing the limb to be controlled by the brain. The new device, which is described today in Nature Medicine, could help people with lower-leg amputations feel as if their prosthesis is part of them.

“When you ask a patient ‘What is your body?’ they don’t include the prosthesis,” says MIT biophysicist Hugh Herr, one of the lead authors on the study. The work is personal for him: he lost both his lower legs in a climbing accident when he was 17. He says linking the brain to the prosthesis can make it feel more like part of someone’s anatomy, which can have a positive emotional impact.s more like a part of the wearer’s body and promises to ma