#Episode28 Daily Update with Sridhar – Markets post vaccine news, Bihar results, Trump vote counts

#DailyUpdateWithSridhar #Episode28 - Markets post vaccine news, Bihar results, Trump vote counts

Sree Iyer: Hello and welcome to PGurus Channel. I am your host Sree Iyer, this is episode 28 of daily update with Sridhar. Sridhar Chityala Ji Namaskar and welcome to PGurus Channel.

Sridhar Chityala: Good morning and Namaskar, very happy to be here.

Sree Iyer: Sridharji, we have a lot of things to discuss and let’s jump right into it, the first one is, what is happening with the Trump Presidential election? We now seem to have the Department of Justice ordering an inquiry into it. What is happening with various states? Where do you see the activity? Can you please summarize for us what’s happening, sir?

Sridhar Chityala: Well, I think that way we are with Trump’s policy, as we discussed yesterday, he will be launching a series of campaigns and protests which is around revolving around the court cases. The cases themselves are being filed in Pennsylvania, in Nevada as well as; I think the cases are likely to come up in Arizona as well as in Michigan. The way we are with these cases is around essentially three principles, one is around the whole transparency, second is around the process by which the postal ballots and other issues where handled and the third is the presence of the officer’s presence of the independent or the Republican representatives at the polling stations just from an objective judgment point of view. Just as you know, Democrats will also need to be there. So that seems to be the serious issue and in places like Nevada and even in Michigan, more specifically Nevada, there seems to be a number of issues that revolve around the validation of the voter list or the duplication and the quality of the data that was kind of turbulent, whether any sanity checks were conducted before it was sent out. Pennsylvania and Michigan is more around backdating, accepting the ballets that past the cutoff times that seems to be the issue. In Michigan, there also seems to have been software errors and glitches the most of the cases are going to be fought around these issues and exclusion of these votes from the counting. How exactly this will take shape is an interesting kind of development that we have to watch and see, as to what happens in courts as well as in the respective states. It’s also been an interesting theory that’s been floated around if some of the states don’t believe that the quality of the elections was transparent and needs some kind of objective intrusion, the states have the power to send its own nominee very similar to how the nominees are sent from various states to either the party conventions. So for example state of Georgia feels like, you know, it has sufficient evidence that it can conduct but it believes that the number of votes justified. Let’s say Biden or it can send Biden or it can send Trump that will put it into an interesting kind of a battle at the Centre. But there is a path along those lines, this is as per the Constitution is not violated, in violation of the Constitution. So there’s a lot to lot left to be run on the presidential side notwithstanding the fact media and many outlets are still trying to assume that this is a foregone conclusion, it’s not a foregone conclusion until such time, the data is obtained and there is a clear process of elimination.

House has gone on and Senate is still hung around 46 plus 248. North Carolina vote 99% cast and President Trump is leading by 75,000 votes plus and they may take a few more days by the time the postal ballots arrive and they make a final decision. Similarly, same with Alaska, but Alaska is Republican seems to be way-way ahead than Democrat so, therefore, you know assume that if you allocate at least one, so that will take Republicans to 49. They have to win two out of the other three, the other two which is into runoffs are in Georgia, Basically because boil down to less than one percent in terms of the difference in the votes between the two candidates. Now, everybody has descended into Georgia, that means that money, as well as resources, are going to be poured in making sure that, Democrats have to win both to reach an even number of 50 and then you have the vice president to exercise. Republicans just need to win one based on what we hear what we see. North Carolina and Alaska could be theirs.

Sree Iyer: That’s good to know, so we are looking at the two pending results from Georgia that will determine the Senate majority and that is probably going to happen only in January. So we will not know who will be the majority leader. I guess after that but up until then, I think Mitch McConnell will continue because this Senate doesn’t go out of office till the 20th of January or whenever the president takes oath. So, please understand that just because you won the new election doesn’t mean that you are in power, there are still a couple of months to go for the existing administration and as part of that existing administration Trump fields full powers, there is no lame-duck government in the United States Constitution, and I think, we clarified this a long time ago. I’m just trying to reinforce that if would like to add something on that Sridharji before I go to politics from other regions.

Sridhar Chityala: No, I think you have covered the topic and I think we have covered the topic most extensively in terms of from an analysis point of view the difference, now, we have to allow the process and legal stuff to run out and there is only one case which is at the Supreme Court level, which the counting and the cut-off time in Pennsylvania, so there’s a sequester, which is after 8 PM to be set aside and counted separately. So that’s the only one where you have right now as we speak. Now, the Department of Justice as well has come in and they are now looking at those cases. They are been asked to look at cases where there’s believe there’s a lot of complaints and where there is any malpractices and the illegal kind of activities that has taken place. I think Richard Pilger who works for Mr. Barr seems to have resigned yesterday. Now, there is a lot of speculation as to why but anyway, we can only report the news, we can’t report speculation, so that’s the story.

Sree Iyer: Thank you, sir. And let’s take a quick look at what is happening in India, especially in Bihar elections, it appears to be a very close fight. I mean the lead is going back and forth the NDA which is the majority players are BJP and Janata Dal-United led by Nitish Kumar is slightly ahead at this time. They are expected to get the majority. What are your thoughts on this? Do you think that the next Chief Minister might be the other Modi, the number two man in waiting for several years under Nitish Kumar? What are your thoughts, sir?

Sridhar Chityala: I think that based on all again on the original exit polls, they were saying that youth is going to be selected over incumbency and fatigue that doesn’t seem to be the case if I have to opine on the matter such subject based on what’s happened in Maharashtra. I think it’s important that BJP plays its cards and ensures that there is a coalition government of BJP or NDA in place if it wants to. And, I don’t know how far Nitish’s presence will help given that there is no clear mandate to him and all the stuff. The mandate seems to be to BJP very similar to Maharashtra where the mandate was to BJP. There’s no doubt Janata Dal’s Tejaswi seems to have clearly performed exceptionally well. So, he has every right and legitimacy to say if he makes up the numbers. ‘Hey, I’m the young, I’m the youth, you know, whether one accepts it or not. I’ve given a very strong performance relative to the past that means I do have the mandate amongst people’. So, I think it’s going to be interesting to see but what I hear, I don’t have the latest but I gather that NDA seems to have aged past the halfway mark in terms of majority if that implies. There were also whispers and rumors that LJP or one of the other parties which has a relationship with BJP, what kind of role they will play is this something that can trump card that Mr. Modi and Mr. Shah have used. There is a lot of speculation around that in terms of you know plan A and plan B to manage the status quo. But one thing is very clear that Modi’s economic programs have charisma is one thing, but charisma backed by economic programs that reach the masses and people saying, ‘okay. I’ve got the benefit and therefore I’m willing notwithstanding the fact that this is coming from the Centre, is very pivotal in what we are seeing in India that has not yet filtered down to something like the United States. Just to give an example, if you take agro reforms in India, 5 states have declined agro reforms or 6 states. When everybody knows that the agro system needs retooling. So there is no point in having a Modi in the Centre if you don’t have a Modi equivalent in the state to carry out the scheme. So similarly, is I bring it to the United States there’s no point in Trump saying, have this this this and then you know New York, California or Florida for that matter saying that ‘Hey, we don’t want to follow social distancing. We are not going to shut down and we’re going to prematurely allow things to open.’ So, one is a very similar kind of architecture. If you want to believe in a program that encompasses reaching wide masses and some alignment and synchronization. Whether there is political maturity in India to accept it – I don’t know. When you asked an interesting question that could be the Achilles heel in terms of what happens in Bihar.

Sree Iyer: Thank you, sir and one can not forget that Obamacare was rejected by Republican Governor Bobby Jindal in the 2009-2010 time frame. He said that we would not use, New Orleans or Louisiana will not take that and that was a very stupid thing because Obamacare was a foundation stone in the way Medical Care was planned in America and that’s one of the things I like about Biden, I think what he has suggested is they’re going to just tweak Obamacare to make it better in terms of bringing down prices. We’ll have to wait and see. I am kind of going into a tangent here sir, please pardon me for that but this thing about partisan politics is sometimes very short-sighted and it actually hurts the people, so I hope the people of Louisiana understand what Mr. Bobby Jindal did and I think they did because he is kind of like vanished from limelight. Anyway, so let’s get back to our latest focus which is now markets. Yesterday markets bounced back very smartly. What are the markets saying today? Because now we are hearing that some other pharma companies also are readying vaccine/drug, sir.

Sridhar Chityala: Well Eli Lilly has got an emergency approval for its plasma treatment drug to be introduced into the market having tested it. I think President Trump himself was a plasma recipient. So you’re getting that into actions. You will very soon see Johnson & Johnson been back with its drug after doing recalibration of the medication in its trials. We are seeing medicines in India. We are saying stuff in from Russia. We are seeing some developments in Germany. So I think the vaccine scenario is developing quite well notwithstanding the fact that there are rising cases of Coronavirus. One of the facts that we didn’t touch on yesterday is that, while this goes on, for the first time in India, they have started to report both the number of cases as well as the number of what you call as recoveries because often, at any given point of time you don’t have 50 million people in the hospital like you probably have 10% i.e, five million people, that’s in a large number I’m not discounting it. So in the case of India, there has been a 92% recovery rate, which is quite remarkable and 1.4% kind of death rate. The United States is still around 70-74%. I think if my numbers are correct, I m just quoting, I might be kind of a little off by the numbers but last I had looked at a few days ago was around 70-74%. So I think the recovery rate is very very important. That means that you can co-exist until such time there is a very formal treatment kind of program. To some extent, the announcement of the vaccine had a very positive market run, something that people had not seen for four-five months and the markets were up about 5% Dow, 3% S&P, and about 1% NASDAQ. The markets are down today and only Dow is up around less than 2%, about 200 points. How many points was one, this was 300 points. What is the market? The market’s saying is rotation. A lot of people are exiting some of the tech-holdings, so that’s why you have, actually NASDAQ futures is down and SNP is also down, but a lot of tech stocks are in NASDAQ so that’s what is down. So what you may see is markets saying ‘hey, there is a bit of a stalemate here and there is uncertainty around the stimulus. Okay, we have had good gains yesterday and its time to take a breather. There’s no new news, put it that way, for markets to kind of react into the positive sentimental territory as yet.

Sree Iyer: Sir, lastly, one minute on the recent latest thing from EU on Amazon antitrust litigation.

Sridhar Chityala: Amazon antitrust litigation was coming and this has been one of the sore points around the world. I think we have always stated, retail is all about data. When we talked about the upward movement in retail sales in one of our earlier update shows. The antitrust litigation is brought about by retailers who sell their products to Amazon and the belief is that the Retailer’s data is being used by Amazon to disenfranchise some of these people with direct retailing kind of capabilities. So they have enough evidence to point out for them to bring about an antitrust motion and I think it’s It could be a multi-billion dollar case. Eventually, there’s going to be some kind of a settlement as the case navigates through the antitrust process. But it is quite significant because remember Amazon is also fighting a case in India where it is opposing Reliance retail acquiring major stake or majority stake or all of the stakes in Future Brands and Future Brands is something in which that Amazon has a stake and they couldn’t succeed in India so they have used Singapore courts to block this transaction and Future Brands has used Delhi High Court or Supreme Court to that there is no jurisdiction. So this whole concept of retail is about, again just very similar to mobile retail is consolidating and Amazon be will at the why just as Walmart was once upon a time when traditional retail was prevalent, you’re going to have Amazon being at the epicenter of all these kinds of initiatives.

Sree Iyer: Well Walmart came out and ate the lunch of small businesses, Mom and Pop businesses, and now Amazon is eating the lunch of Walmart, somebody else will come and eat the lunch of Amazon but not right now. Right now, Amazon seems to have figured out every way. But this specific lawsuit is going to be very interesting. My guess is that the same algorithm is deployed across the world. But there may be some ripple down effects also. Thank you very much Sridharji, we are out of time now. And we’ll be back tomorrow again, same time, same channels Namaskar

Sridhar Chityala: Namaskar. Thank you.


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