Stocks opened this morning with strong gains on firm global cues.
Join us as we follow the top business news through the day.
US Fed official says worst is yet to come on job front
The humongous economic cost of the global lockdown is only set to get worse, according to an official at the US central bank.
PTI reports: "A US Federal Reserve official said that the worst was yet to come on the employment front after a staggering 20.5 million jobs were slashed in April amid the COVID-19 pandemic.
“I mean the worst is yet to come on the job front, unfortunately. And that it really is going to be, you know, as these states start to reopen and as businesses start to reopen, obviously we need them to reopen safely,” Xinhua news agency quoted Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, as saying on ABC News on Sunday
“We may be in an environment of gradual relaxing and then having to clamp back down again around the country as the virus continues to spread,” he said.
“To solve the economy, we must solve the virus. Let’s never lose sight of that fact.”
“What I’ve learned in the last few months, unfortunately, this is more likely to be a slow, more gradual recovery,” Kashkari said, throwing cold water on White House officials’ optimistic expectation about a very strong second half of 2020 and a roaring 2021.
“When we look around the world, there’s evidence that when countries relax their economic controls, the virus tends to flare back up again. And the longer this goes on, unfortunately, the more gradual the recovery is likely to be,” he said.
The Fed official noted that a “robust economy” would require a breakthrough in vaccines, widespread testing and therapies to give people confidence that it is safe to go back.
“I don’t know when we’re going to have that confidence,” he said.
Kashkari’s remarks came after Treasury Secretary Steven Mnuchin told Fox News earlier on Sunday that the unemployment numbers were probably “going to get worse before they get better”, acknowledging that the current jobless rate may have already hit 25 per cent."
Must you keep off debt mutual funds?
The Franklin Templeton crisis has brought to light many instances of mis-selling and mis-buying in debt mutual funds (MFs), where many folks seem to have signed up for these products without understanding their true nature.
Here are specific situations in which you should avoid investing in debt funds.
Securing the principal
If the top attribute you look for in a debt investment is your principal remaining intact, then debt MFs aren’t for you. Unlike deposits or small savings schemes, debt MFs are market-linked vehicles that pass on not just interest receipts, but also capital gains or losses on the bonds they own, to you.
Some categories of debt funds are highly prone to capital losses. Funds which invest in longer-dated government securities or bonds fall in this category.
Sensex rallies over 500 points; Reliance jumps 3%
The benchmark indices have opened strong this morning on firm global cues.
PTI reports: "Equity benchmark Sensex surged over 500 points in opening session on Monday as strong gains in index-heavyweights Reliance Industries, HDFC, Infosys and positive cues from global markets boosted market sentiment.
After touching a high of 32,182.36, the 30-share index was trading 531.55 points or 1.68 per cent higher at 32,174.25.
Similarly, NSE Nifty surged 148.65 points, or 1.61 per cent, to 9,400.15.
Reliance Industries was the top gainer in the Sensex pack, soaring over 3 per cent, followed by UltraTech Cement, Maruti, Bajaj Auto, IndusInd Bank and ITC.
In the midst of all the coronavirus-driven chaos, Reliance Industries seems to have created its own bull market territory through a V-Shaped recovery by concerted efforts to bring quality investors, reduce its net debt and streamline its balance sheet, said Jimeet Modi, Founder and CEO, Samco Securities."