Latest news with #MattOrton
Economic Times
3 days ago
- Business
- Economic Times
Weaker dollar and emerging market flows support a bullish case for India: Matt Orton
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads "What companies are doing now is we have kind of gone through all of the inventories they had already stocked up, but companies are taking advantage of this pause to manage and restock some inventories in advance of some of these tariffs or what might be negotiation up and down with respect to where the rates ultimately fall," says Matt Orton , Raymond James is definitely a risk, but when you are looking at tariffs now, so you had this 90-day reprieve, July 9th, is the day at which we need to have some sort of trade deals put in place. So, what companies are doing now is we have kind of gone through all of the inventories they had already stocked up, but companies are taking advantage of this pause to manage and restock some inventories in advance of some of these tariffs or what might be negotiation up and down with respect to where the rates ultimately at the end of the day, the American consumer can bear some of that weight. Corporate margins are close to record highs right now. Those margins can compress a little bit to eat perhaps some of what those tariffs might look like. So, a lot of it can be taken on by the overall economy. The economy is definitely going to slow, but I think that was a base case heading into this were running at an above trend rate for a long time. So, my expectation even absent tariffs was that we were going to see a slowdown. But the key is that we have avoided recession, with the walk back with respect to tariff policy, all of those scenarios are off the table and that is good enough to support growth, nominal GDP growth, that can support you are already seeing that. So, weaker dollar has certainly benefited emerging markets and you have seen flows move into emerging markets from the US in particular. There is a case for US dollar to remain weak for the rest of this year especially as you see tariffs start to take effect. So, you will have the interplay of a persistently weaker dollar to help emerging markets, I think that supports the overall economy and if you have commodity prices, especially oil, that is fairly well supplied around the rest of the world, that again provides a support for growth in a market like India. So, there is a lot of longer-term supportive tailwinds to make the more bullish case for India absent all of the global uncertainty that might be one of my longer-term holdings is in one of the most successful holdings we have had, has been ICICI Bank , that has just been a compelling investment. I like the story with respect to growth, net interest margins, and also the private banking side as well that continues to grow. It is leveraged to a lot of the long-term growth themes in India. So, that has been a really exciting opportunity and it still looks very attractive despite the gains so far this is true. So, that is one of the reasons I do not like China as a long-term investment is, there is still a lot of state-owned enterprises and plus then you have on top of that the risk of what the central government is going to do. You do not have that in India where there is not a dictator who rules the country and sets what companies can or cannot do and state-owned enterprises are just less efficient inherently. So, when you look at like SBI versus an ICICI Bank , there is a clear difference with respect to where loan growth is going, asset quality credit mix. So, again, the private banking side at least right now is still a much more attractive place to be.
Time of India
3 days ago
- Business
- Time of India
Weaker dollar and emerging market flows support a bullish case for India: Matt Orton
"What companies are doing now is we have kind of gone through all of the inventories they had already stocked up, but companies are taking advantage of this pause to manage and restock some inventories in advance of some of these tariffs or what might be negotiation up and down with respect to where the rates ultimately fall," says Matt Orton , Raymond James Investment. In general, the view is tariff impact would be felt in the second half of this calendar year, which is that is the time you will actually start seeing the effect of the tariff. Right now, it is a sugar rush because everybody in a sense consumed more or loaded more ahead of tariff. Is that a real risk? Matt Orton: There is definitely a risk, but when you are looking at tariffs now, so you had this 90-day reprieve, July 9th, is the day at which we need to have some sort of trade deals put in place. So, what companies are doing now is we have kind of gone through all of the inventories they had already stocked up, but companies are taking advantage of this pause to manage and restock some inventories in advance of some of these tariffs or what might be negotiation up and down with respect to where the rates ultimately fall. But at the end of the day, the American consumer can bear some of that weight. Corporate margins are close to record highs right now. Those margins can compress a little bit to eat perhaps some of what those tariffs might look like. So, a lot of it can be taken on by the overall economy. The economy is definitely going to slow, but I think that was a base case heading into this year. We were running at an above trend rate for a long time. So, my expectation even absent tariffs was that we were going to see a slowdown. But the key is that we have avoided recession, with the walk back with respect to tariff policy, all of those scenarios are off the table and that is good enough to support growth, nominal GDP growth, that can support earnings. But coming back to India, we do have a historical trend which in a sense has endorsed that every time when there is a little bit of problem in the developed market and when there is weakness in the currency, which is dollar index, flows they come back to into emerging markets . Will the script play out again? Matt Orton: So, you are already seeing that. So, weaker dollar has certainly benefited emerging markets and you have seen flows move into emerging markets from the US in particular. There is a case for US dollar to remain weak for the rest of this year especially as you see tariffs start to take effect. So, you will have the interplay of a persistently weaker dollar to help emerging markets, I think that supports the overall economy and if you have commodity prices, especially oil, that is fairly well supplied around the rest of the world, that again provides a support for growth in a market like India. So, there is a lot of longer-term supportive tailwinds to make the more bullish case for India absent all of the global uncertainty that might be around. Live Events So, other than infra, any other opportunities you are scouting for when it comes to India? Where is it that you have your largest exposure here sectorally? Matt Orton: So, one of my longer-term holdings is in one of the most successful holdings we have had, has been ICICI Bank , that has just been a compelling investment. I like the story with respect to growth, net interest margins, and also the private banking side as well that continues to grow. It is leveraged to a lot of the long-term growth themes in India. So, that has been a really exciting opportunity and it still looks very attractive despite the gains so far this year. In general, the belief is that global investors do not like PSUs, government-dominated stocks. Is that true for you as well? Matt Orton: It is true. So, that is one of the reasons I do not like China as a long-term investment is, there is still a lot of state-owned enterprises and plus then you have on top of that the risk of what the central government is going to do. You do not have that in India where there is not a dictator who rules the country and sets what companies can or cannot do and state-owned enterprises are just less efficient inherently. So, when you look at like SBI versus an ICICI Bank , there is a clear difference with respect to where loan growth is going, asset quality credit mix. So, again, the private banking side at least right now is still a much more attractive place to be.
Economic Times
3 days ago
- Business
- Economic Times
India a top growth market but still underowned globally: Matt Orton
Agencies Trump was elected talking about 10-15% tariffs, that is essentially where we have settled right now in the US. "There are a lot of companies who are actively involved in this, but L&T is one of the names I have been looking at deeper, just given an incredibly clean balance sheet, but they have not only exposure to Indian infrastructure but also infrastructure in the GCC where there is a tremendous amount of capex and development and hydrocarbons, ports, all of that. So that is a really-really interesting play right now," says Matt Orton, Raymond James Investment. What brings you to India? Matt Orton: So, I am here for an investor conference with Bank of America. So, as we have talked a lot about India being one of my favourite regions. So, there is a lot of interesting companies that we look at, invest in, and so being able to speak with management teams in person, ask a lot of the questions you need, finding new ideas, I think that is all a critical part of the investment process. And so, it is wonderful to be able to do that in person and then share and talk about ideas with other investors as well. Is it your first India trip? Matt Orton: So, this is my second time in Mumbai. When was the last one? Matt Orton: Last year. So, I was here for the elections which was quite an exciting time to be here. But I bet visibly you must have seen a lot of infra development. I mean, that is something that you cannot miss if you visit Mumbai even a year after. Any infra companies which are part of your portfolio or you are scouting for? Matt Orton: Absolutely. So, the infrastructure story is incredibly exciting. You come here and see the coastal highway between last year and this year just the tunnel being opened, being able to get from where we are in South Mumbai over to here this morning, it is amazing. So, there are a lot of companies who are actively involved in this, but L&T is one of the names I have been looking at deeper, just given an incredibly clean balance sheet, but they have not only exposure to Indian infrastructure but also infrastructure in the GCC where there is a tremendous amount of capex and development and hydrocarbons, ports, all of that. So that is a really-really interesting play right now. We had Ridham Desai from Morgan Stanley before you came in and he is like okay India everybody knows, everybody loves, but hardly anybody owns it. Is that true from a global perspective that India is a great market to go, but in terms of commitment levels they are minuscule?Matt Orton: It is true. There is a couple of things that are at play. India is a more challenging market to invest in as an overseas investor. You have to be very committed to open up trading licenses. There is definitely passive ways you can play it by some of the ETFs, but there are not as many active options. So, I think as an investor, that is what makes it more exciting because you do not have a tonne of foreign flows going into these companies, there is more room for these ideas to play out. But in conversations with clients, especially as clients are finally starting to look overseas as opposed to the US being the only option as you see good returns coming from the rest of the world, there is a very real openness to finding new markets and other long-term growth opportunities. And so, India is certainly one that is very exciting and is a standout relative to say Europe where there is some very-very interesting opportunities there, but there is not the same growth story. We are looking at the fourth largest economy, soon to be third largest economy in the world, that is a tremendous pool of really-really compelling investments. So, for the long term, you have such growth with the market that I would argue is still underpenetrated from an investment perspective. So, country-wise, which is your largest exposure or region? Matt Orton: So, the US is my largest region right now. I think that the earning story continues to play out. The US market continues to scale this wall of worry. It has been one of the most hated rallies I can remember. But when you look at the fundamentals, the fundamentals are working. Corporate America is working. A lot of the long-term secular growth themes like artificial intelligence, changes to consumer habits, those are all compelling ideas where you are seeing compounding returns in the US. But you look to a market like India as well, a lot of those same themes are playing out and they are embedded even in stories of financial companies, auto companies. So, there is a lot of ways you can play this and that is what I try and do is find these long-term growth themes and how does that fit into different companies around the world. But you do not think there would be a tariff hit back and that is going to stall the growth in US? Matt Orton: So, tariffs are going to hit growth in some way shape or form but a lot of that is already baked into the market. So, you had that vicious selloff after Liberation Day in the US and investors realise that is certainly the ceiling to where tariffs go. Trump was elected talking about 10-15% tariffs, that is essentially where we have settled right now in the US. So, there is going to be ups and downs as we negotiate these trade deals. But hopefully, as you start to see some of them come to the table and you get through that volatility, the market will have recalibrated by that point and it will become fundamentally driven again and we saw what that could look like during earning season.
Time of India
3 days ago
- Business
- Time of India
India a top growth market but still underowned globally: Matt Orton
"There are a lot of companies who are actively involved in this, but L&T is one of the names I have been looking at deeper, just given an incredibly clean balance sheet, but they have not only exposure to Indian infrastructure but also infrastructure in the GCC where there is a tremendous amount of capex and development and hydrocarbons, ports, all of that. So that is a really-really interesting play right now," says Matt Orton , Raymond James Investment . What brings you to India? Matt Orton: So, I am here for an investor conference with Bank of America . So, as we have talked a lot about India being one of my favourite regions. So, there is a lot of interesting companies that we look at, invest in, and so being able to speak with management teams in person, ask a lot of the questions you need, finding new ideas, I think that is all a critical part of the investment process. And so, it is wonderful to be able to do that in person and then share and talk about ideas with other investors as well. Is it your first India trip? Matt Orton: So, this is my second time in Mumbai. When was the last one? Matt Orton: Last year. So, I was here for the elections which was quite an exciting time to be here. But I bet visibly you must have seen a lot of infra development. I mean, that is something that you cannot miss if you visit Mumbai even a year after. Any infra companies which are part of your portfolio or you are scouting for? Matt Orton: Absolutely. So, the infrastructure story is incredibly exciting. You come here and see the coastal highway between last year and this year just the tunnel being opened, being able to get from where we are in South Mumbai over to here this morning, it is amazing. So, there are a lot of companies who are actively involved in this, but L&T is one of the names I have been looking at deeper, just given an incredibly clean balance sheet, but they have not only exposure to Indian infrastructure but also infrastructure in the GCC where there is a tremendous amount of capex and development and hydrocarbons, ports, all of that. So that is a really-really interesting play right now. Live Events We had Ridham Desai from Morgan Stanley before you came in and he is like okay India everybody knows, everybody loves, but hardly anybody owns it. Is that true from a global perspective that India is a great market to go, but in terms of commitment levels they are minuscule? Matt Orton: It is true. There is a couple of things that are at play. India is a more challenging market to invest in as an overseas investor. You have to be very committed to open up trading licenses. There is definitely passive ways you can play it by some of the ETFs, but there are not as many active options. So, I think as an investor, that is what makes it more exciting because you do not have a tonne of foreign flows going into these companies, there is more room for these ideas to play out. But in conversations with clients, especially as clients are finally starting to look overseas as opposed to the US being the only option as you see good returns coming from the rest of the world, there is a very real openness to finding new markets and other long-term growth opportunities. And so, India is certainly one that is very exciting and is a standout relative to say Europe where there is some very-very interesting opportunities there, but there is not the same growth story. We are looking at the fourth largest economy, soon to be third largest economy in the world, that is a tremendous pool of really-really compelling investments. So, for the long term, you have such growth with the market that I would argue is still underpenetrated from an investment perspective. So, country-wise, which is your largest exposure or region? Matt Orton: So, the US is my largest region right now. I think that the earning story continues to play out. The US market continues to scale this wall of worry. It has been one of the most hated rallies I can remember. But when you look at the fundamentals, the fundamentals are working. Corporate America is working. A lot of the long-term secular growth themes like artificial intelligence, changes to consumer habits, those are all compelling ideas where you are seeing compounding returns in the US. But you look to a market like India as well, a lot of those same themes are playing out and they are embedded even in stories of financial companies, auto companies. So, there is a lot of ways you can play this and that is what I try and do is find these long-term growth themes and how does that fit into different companies around the world. But you do not think there would be a tariff hit back and that is going to stall the growth in US? Matt Orton: So, tariffs are going to hit growth in some way shape or form but a lot of that is already baked into the market. So, you had that vicious selloff after Liberation Day in the US and investors realise that is certainly the ceiling to where tariffs go. Trump was elected talking about 10-15% tariffs, that is essentially where we have settled right now in the US. So, there is going to be ups and downs as we negotiate these trade deals. But hopefully, as you start to see some of them come to the table and you get through that volatility, the market will have recalibrated by that point and it will become fundamentally driven again and we saw what that could look like during earning season.
Time of India
26-05-2025
- Business
- Time of India
Matt Orton explains why dips are viable in the US market
Matt Orton , Head of Advisory Solutions and Market Strategy, Raymond James Investment , says following a strong rally, the US market's future direction hinges on marginal policy shifts, especially concerning tariffs. Investors should prepare for potential dips, particularly if they missed opportunities earlier. While earnings justify market gains absent tariffs, the market has already factored in a baseline tariff, reacting to specific trade deal developments and future progress. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like The truth behind OS scheduling algorithms expertinspector Undo Trump's policy is Olive branch and iron fist, then olive branch, and then iron first. What is coming next? Matt Orton: What we are going to continue to see is this back and forth. It has been happening since Liberation Day on April 2nd and the market has digested that. At first, the market prepared itself for the worst, very high tariffs across the rest of the world and the rally that we had through the month of April, throughout May has been quite spectacular. So, what the market has realised is earnings, the base from which we are going to come, how the economy has been growing, all of that is in a very solid place. The damage that tariffs are going to inflict is not going to put the economy into a recession. That has never been my base case and the pivots that we have seen from the administration help to confirm that. But now that we have had this strong rally and since we do not really have the positive catalysts of the earning season coming, I suspect the market is going to be driven by these marginal directional changes of administration. I tell investors to be ready to use some of that downside if they were not as aggressive towards the bottom of the market in April because again the market is going to be able to see through all of this once we start getting increasing clarity. Are markets already capturing a bit of an upside and are markets already assuming that tariff is not going to be as high as what was indicated in March and April? Matt Orton : The markets are baking in some of that. Obviously, the markets are not baking in the entirety of zero tariffs going forward. The market has digested a 10% baseline tariff across the entire world and now the reactions are going to be very much with respect to who is getting more, who is having the trade deal signed, and where we might start to progress in the near future. When you look at earnings, you can justify the move that we have had in the market because absent tariffs is obviously counterfactual, but if we had not had tariffs put in place, we would probably be at 7,000 plus on the S&P 500 after an earnings season that was almost double of what expectations were. Live Events You Might Also Like: Trump tariff push to make iPhones dearer for US market, labour cost may rise 13 times: Experts We have got some big companies like Nvidia reporting this week which are probably still going to be strong. I think the markets have baked in some good news, but they are not overestimating that, which is why I think dips are viable in the US market. The good news here in India is that we have overtaken Japan to become the fourth largest economy in the world. But talking about Japan, the fact that their core inflation is already at a two-year high could perhaps force the BOJ to hike as well. What are you making of the Japanese economy because there has been a lot of volatility in their bond markets? Matt Orton: Yes, there has been and when you look at all of the major global bond markets, there has been a lot of volatility and there has been a lot of steepening of yield curves, long-dated yields not just in the US but across all of the major economies and bond markets have been very elevated. Part of that is idiosyncratic, part of that is the large institutional buyers in those countries just have not been as aggressive. Japan, in particular, has not seen a lot of buying flow from pensions. If anything, there may have been a little bit of selling from some of the insurance companies that tend to be systematic buyers. But the Japanese economy is tied to trade. There is uncertainty with respect to where that direction is going to go, which is why any sort of trade deal that gets inked in the near future can be a very positive catalyst for that market because before we got into April and before you had the large reciprocal tariffs, Japanese earnings expectations were one of the only countries around the world where you actually had positive and accelerating earnings expectations from analysts. So, if we can get back to a place where there is more certainty around trade, that will benefit the Japanese economy overall. It is a country to keep eyes on, but don't wade into that too early. You Might Also Like: Wall Street on edge this week: Will Nvidia's earnings revive markets or fuel chaos amid soaring U.S. Debt?
