As Indian equity markets grapple with stiff valuations, investors are increasingly exploring international opportunities, particularly in the United States.

Wall Street’s recent strong performance, led by technology stocks, has made US equity mutual funds a viable diversification strategy.

According to a report by The Economic Times, financial planners are recommending investors to allocate 5-10% of their equity portfolios to US markets, staggering investments over the next year to mitigate risks from the sharp run-up in valuations.

Indian vs US equities: a valuation snapshot

At present, the S&P 500 trades at a price-to-earnings (PE) ratio of 25.41, slightly lower than the Nifty 500’s 26.5.

Vishal Dhawan, founder of Plan Ahead Wealth Advisors, notes in the report,

At the broad index level, valuations of Indian and US equities are similar. Several US companies are expected to show strong growth.

Dhawan advocates systematic investment plans (SIPs) in funds like Franklin US Opportunities Fund for those with a higher risk tolerance.

Some diversified and sectoral equity mutual fund schemes have a provision to allocate up to 35% to overseas equities.

Schemes like PPFAS Flexicap Fund have a mandate to invest in global companies.

Indian and US markets together exposes an investor to 30% of global GDP

The US accounts for approximately 25% of global GDP and hosts unique businesses in emerging sectors, making it an attractive destination for Indian investors.

A note from Motilal Oswal Mutual Fund highlights that combining investments in the US and Indian markets provides exposure to 30% of global GDP.

Additionally, the low correlation between US and Indian markets helps reduce portfolio volatility, enhancing risk-adjusted returns.

Over the past year, the S&P 500 surged 37%, outpacing the Nifty 500’s 25.29% gain.

“The US markets are up sharply, led by technology stocks in the last one year, but the move ahead is not going to be one-sided,” said Vineet Nanda, founder, SIFT capital.

Nanda believes investors could stagger investments and use a buy on dips approach.

However, wealth managers caution against over-allocating to the US.

Feroze Azeez, deputy CEO of Anand Rathi Wealth, warns, “The US market faces geopolitical risks, inflationary pressures, and Federal Reserve policy uncertainties.”

Investors should maintain a strong domestic equity position while considering small allocations to US equities.

Regulations limit options for US equity investments

Despite the appeal, Indian investors face limited options for US equity investments, distributors say.

This is because the Reserve Bank of India (RBI) enforces a cap of $7 billion for mutual funds and an additional $1 billion for exchange-traded funds (ETFs).

This restriction limits the availability of funds focusing on mid- and small-cap US stocks or sectors outside technology.

Many fund houses have halted new investments due to these limits.

For those keen on US exposure, options include large-cap-focused funds or Nasdaq 100 ETFs, which are heavily weighted towards technology.

Furthermore, international funds enjoy favourable tax treatment, with a long-term capital gains tax of 12.5% after a two-year holding period.

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The cryptocurrency world is buzzing with the rapid rise of iDEGEN, an AI-driven meme token that has surged 4731% in its ongoing presale. Combining cutting-edge artificial intelligence with degen culture, iDEGEN has captivated traders and investors alike.

With a dynamic pricing model that fosters volatility and an innovative approach to community engagement, this token has become a standout contender in the crypto landscape.

A dynamic pricing model designed for traders

iDEGEN’s presale employs a unique dynamic pricing mechanism that creates a fast-paced and exciting trading environment. Prices are adjusted every five minutes based on market activity, offering three potential scenarios.

If at least one purchase occurs within a five-minute interval, the price remains steady for the next cycle. Consecutive purchases across two intervals trigger a 5% price increase, rewarding consistent demand. Conversely, inactivity during an interval results in a 5% price drop, providing opportunities for bargain hunters.

This dynamic approach appeals to traders seeking volatility and quick gains, driving significant interest in the presale. Since its launch on November 26, 2024, iDEGEN has raised over $4.2 million and sold more than 943 million tokens, demonstrating strong market enthusiasm.

The presale will conclude on January 1, 2025, and the token’s listing price will be 10% higher than the final presale value, adding further incentive for early adopters.

AI-powered community engagement

Besides the dynamic presale pricing model, the other thing that sets iDEGEN apart is its integration of artificial intelligence (AI) to foster community engagement and adapt its development.

Dubbed the “fatherless AI” born from a mix of a degen’s sock and an Nvidia chip, iDEGEN embraces a humorous yet innovative identity. Its AI actively learns and evolves by absorbing data from tweets directed at it.

This interaction-driven model enables iDEGEN to respond to every tweet and post hourly updates without moderation or training guardrails.

This highly interactive approach has cemented iDEGEN’s place as a community-centric project. By leveraging X (formerly Twitter), iDEGEN ensures its development aligns with user feedback and the ever-changing dynamics of the crypto space. The slogan “AI Born. Degen Raised.” encapsulates its ethos, combining technological innovation with the chaotic spirit of crypto degen culture.

As the presale nears its end, all eyes are on its listing in January 2025, where its value is expected to climb even higher. For investors seeking a mix of cutting-edge technology and high-risk, high-reward opportunities, iDEGEN offers a compelling proposition.

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Delta Air Lines stock price has done well this year, and is hovering near its all-time high of $67.45 as the aviation industry continues to recover. It has risen by over 57% this year, outperforming the S&P 500 and Nasdaq 100 indices that have jumped by less than 30%.

Why Delta Air Lines stock is soaring

Delta Air Lines shares are soaring, in sync with what is happening in the aviation sector. In Europe, IAG is one of the best-performing stocks as it soared by over 106% this year. 

Similarly, in Australia, the Qantas share price has soared to a record high this year as demand rose and as the company boosted its reputation among customers and investors. 

In the US, United Airlines stock has soared by over 150% this year, while American Airlines has risen by 94% from the lowest point this year. The closely-watched US Global Jets ETF (JETS) has risen to $26, up by 57% from its lowest point this year. 

Delta Air Lines, the biggest company in the industry, is the envy of all companies because of its size and profitability. 

Its net profit margin stands at 7.7%, while United Air Lines and American Air Lines have margins of 4.9% and 0.51%, respectively. Ryanair, the biggest company in the United States, is the only other major airline with better margins. 

Its margins are higher because of investments in premium travel, which is doing well. Indeed, the management expects that its premium ticket revenue will exceed main cabin sales by 2027

Delta Air Lines has a strong market share in the United States, where it commands a 17% market share. It is followed by other companies like Southwest, American, United, Alaska, and JetBlue. 

The company’s top competitive advantage is that it has bases across the country and that SkyMiles, its loyalty program has become a major part in its business. It has over 120 million customers. Data shows that the value of the miles earned stood at over $3.4 billion. 

DAL business is doing well

The most recent financial results showed that its business was doing well as its revenue growth continued. Its operating revenue rose to $15.7 billion, while its operating income rose to $1.4 billion. 

Delta Air Lines had a pre-tax income of $1.6 billion and an operating cash flow of over $1.3 billion. 

Analysts are hopeful that Delta Air Lines will continue doing well this year. The average revenue estimate is that it will make over $14.6 billion this quarter, bringing the annual figure to $60.7 billion. It will then make $61.6 billion next year.

The biggest challenge that Delta is facing is that airfares are not growing this year because of the waning demand. Also, it is facing challenges related to Boeing, the giant airline manufacturer. Delta Air Lines is also seeing intense competition from United Air Lines, whose turnaround is accelerating. 

Read more: Delta Air Lines is in the ‘best fundamental shape it has ever been in’

Delta Air Lines stock price analysis

The daily chart shows that the DAL stock price has done well this year. It remains above the 50-day and 100-day Exponential Moving Averages (EMA). Also, the company has formed a bullish flag pattern, a popular continuation sign. 

This pattern is made up of a long vertical line and a rectangle pattern. In most periods, this pattern results in a bullish continuation.

Therefore, the stock will likely continue rising, with the next point to watch being at $70, which is about 10% above the current level. A drop below the lower side of the flag at $62 will invalidate the bullish view.

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The IAG share price has been in a strong trajectory this year, moving to its highest level since March 2020. Most recently, the stock has risen in the last six consecutive weeks, making it one of the best-performing companies in London. It has risen by over 220% from its lowest point in 2022. 

IAG business is booming

IAG, the parent company of firms like British Airways, Iberia, LEVEL, and Aer Lingus, is doing well this year. It has become the second-best-performing company in the aviation industry after United Airlines. 

This growth mirrors that of other airlines. United Air Lines stock has jumped by over 150% this year, while Qantas and Delta Air Lines are up by double digits this year.

The stock surged after its business continued to fire on all cylinders as evidenced by the rising load factor. 

IAG’s business is doing well. The most recent financial results showed that its revenue rose to €24 billion in the first nine months of the year. That was big increase from the €22.2 billion a year earlier.

IAG’s profit after tax continued doing well, rising to €2.3 billion, while its basic earnings per share rose to 47.6 cents. These numbers meant that the company was seeing elevated demand across all its divisions, a trend that will continue.

IAG’s main advantage is that its top airlines have a good market share in key markets. For example, British Airways continues doing well in the transatlantic route, which is one of the most profitable. The North Atlantic route accounted for about 31.7% of the total ASK, followed by Europe and Latin America.

Read more: Here’s why the IAG share price just popped

IAG is now paying dividends

The return to profitability has pushed IAG to restart paying dividends. It paid an interim dividend of about €0.03 on September 9, and the management expects to continue making these payments in the future. Also, it has started repurchasing shares, with an ongoing €350 million plan.

IAG has also worked to improve its balance sheet. It ended the last quarter with over €16 billion in borrowings and €9.8 billion in cash and cash equivalents. It had €6.8 billion in cash and €16 billion in borrowings a year earlier.

IAG share price has also benefited from the relatively stable fuel prices. According to IATA, the average jet fuel price stands at $239, down by 22% from a year earlier. The cheapest prices are in North America, followed by Europe Asia, and Oceania. 

However, the company has also faced some challenges. For example, the company will continue paying higher salaries, following a negotiated deal in 2023. The deal called for a 13% wage increase in a 18% month period. 

IAG share price analysis

IAG chart by TradingView

Turning to the weekly chart, we see that the IAG stock price has done well in the past few months. It has recently crossed the important resistance at 220p, the highest swing in March 2021. 

The stock has moved above the 50% Fibonacci Retracement level and formed a golden cross pattern. This pattern forms when the 50-week and 200-week Exponential Moving Averages (EMA) cross each other. 

The MACD and the Relative Strength Index (RSI) show that the stock has momentum as the latter has moved to the overbought level.

Therefore, the stock will likely continue rising as bulls target the next key level at 310p, the 61.8% retracement point. In the long term, the stock may jump to 450p. A drop below the key support at 200p will invalidate the bullish view. 

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The HSBC share price is firing on all cylinders and is hovering at its all-time high as the company’s turnaround measures continue. It has risen in the last five consecutive weeks and moved to a record high of 755p. 

HSBC turnaround continues

HSBC, the biggest European bank, has been in a prolonged turnaround approach as the management aims to boost profitability and boost efficiency. 

The most important measures in this period has been its decision to exit key markets that were less profitable. Its goal has been to solidify its presence in Asia and in Europe. 

It exited the US market by selling its business to Citizen Bank. It did that by selling 90 branches and retaining the rest in a bid to target wealthy clients. 

The company then sold its Canadian business to RBC and its French business to Credit  Commercial de France. Most recently, the company exited its South African and Argentinian businesses. It also sold its German private banking business to BNP Paribas. There are rising odds that it will continue exiting other countries.

At the same time, the company has made several acquisitions to boost its market share in the remaining locations. For example, it recently acquired Citigroup’s Chinese retail wealth business. It also bought UK’s branch of Silicon Valley Bank as the company collapsed. 

The management has done more actions to boost its efficiency. It recently announced a strategic decision to comhine its commercial and investment banking divisions as part of Georges Elhedery’s push to eliminate overlapping roles and lower expenses.

In a report on Thursday, Bloomberg said that it is aiming to cut at least $3 billion in costs during the ongoing restructuring. These huge sums represent about 10% of its operating expenses

Read more: HSBC share price yields 7% and has numerous catalysts ahead

Results are paying off

HSBC’s actions come at a difficult time for the company. For one, China, a country it is seeking to gain market share in, is slowing and struggling to hit its 5% growth target. As a result, officials have unveiled a $1.4 trillion stimulus package aimed at stabilizing local administrations.

The reality, however, is that China’s key sectors like in real estate and the stock market are struggling, which is affecting its potential wealthy clients. It was also forced to book losses as customers default.

The most recent financial results showed that its profit before tax rose to $8.5 billion in the third quarter, a $0.8 billion rise. This growth was mostly because of its weath and personal banking division. Profit after tax rose to $6.7 billion and the company announced a $3 billion buyback.

HSBC’s revenue rose by 5% to $17 billion, even as the net interest income (NII) dropped by $1.6 billion. NII will likely continue falling as interest rates in key countries drop.

HSBC share price analysis

HSBC chart by TradingView

The weekly chart shows that the HSBC stock price has been in a strong uptrend in the past few years. It rose from the pandemic low of 220p to 755p today. This rally has mirrored that of other top European banks like Unicredit and UBS.

HSBC has formed an ascending channel, and is now a few points below its upper side. Also, it has remained above the 50-week and 25-week Exponential Moving Averages, while oscillators like the Relative Strength Index (RSI) and the MACD have continued rising.

Therefore, using trend-following principles, the path of the least resistance for the stock is bullish. The next point to watch will be at 800p, which is the upper side of the ascending channel. The alternative scenario is where it retreats and retests the lower side of the rising channel. 

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