US to play bigger role than China in global growth in 2021, Ajay Bagga tells Anil Singhvi; US markets to outperform; crude to remain below USD 70

After some nervousness during the previous week, the US markets are now back in action. What are the cues for the domestic markets? In chat with Zee Business Managing Editor Anil Singhvi, Market Expert Ajay Bagga talked about global growth in 2021, US markets’ performance, Crude oil outlook and much more. 

Bagga said that China took the lead in Global recovery after the 2008 recession, but this time US will take the lead. He opined that the contribution of US in the Global growth in 2021 will be greater than China and this is a very significant thing. 

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He said that US market will outperform, though it is to be seen if the growth and momentum stock that performed during the pandemic will again run or the cyclical stocks like metals, energy or financials will do more. 

He said that a big chunk of money will drift towards the American Markets. 

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#BazaarKiBaat | 2021 में ग्लोबल ग्रोथ में अमेरिका का योगदान चीन से ज्यादा रहेगा, अमेरिकी बाजार आउटपरफॉर्म करेंगे। क्रूड का $70 के पार जाना अभी मुश्किल: अजय बग्गा, ग्लोबल मार्केट एक्सपर्ट#StockMarket #DowJones #NASDAQ @AnilSinghvi_ @Ajay_Bagga pic.twitter.com/r1J5lfGruN

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Bagga also said that the stimulus package announced by Joe Biden’s government is likely to be passed today. Another important statistic that has come out from the US Markets is that the retail investments have exceeded their mutual funds and hedge funds. 

It is also expected that the funds worth USD 300-350 billion is likely to go to the US households over the next 2-3 weeks. Around 30-35 per cent of this amount will get into the US Markets. He said that USD 170 billion will come into the markets over the next 4 months. 

Bagga further said that he would bet on cyclical stocks which will move with the economic recovery. 

The unemployment insurance worth USD 100 billion has been renewed. 

There will be no interest rate hike from US Central Bank for the next two years, Bagga said. He said that there will be some inflation in the short term. 

The inflation numbers from China have come today, and their producers’ inflation has risen while consumers inflation has come down. In the medium term, the supply is ample, but the demand will not be as much. 

He said that it is unlikely that the crude oil prices will go above USD 70 as there is not enough demand. Aviation is down by 40 per cent and driving consumption is down by 20 per cent. 

If the crude oil prices do not rise, it augurs well for the Indian economy, he said.