🇺🇸 Fed drops rates

Good morning and Happy Friday.

The first episode of The Penguin releases today on JioCinema.

So excited to see the mastery of Colin Farrell and what appears to be a fantastic comic fiction series 🐧 🎥 

- Ruchirr Sharma & Shatakshi Sharmaa  

TABLE OF CONTENTS

• 🇮🇳 Fed drops rates - here’s what it means for India

• 🧑‍🏭 Tragic death sparks debate on corporate work culture

• 🗞️ Bite-sized summaries

  • 👨‍👩‍👧‍👦 23andMe board resigns

  • 🧑‍🏫 More bad news for Byjus

• 🧑‍🍳 What else is cookin’?

• 🍿 Entertainment, Entertainment, Entertainment

MARKETS

🇮🇳 India

• The Indian stock market closed higher on Thursday. The positive trend followed the US Federal Reserve's decision to cut interest rates by 50 basis points, although profit-booking limited gains. NTPC and Titan were among the top gainers, while BPCL faced significant losses.

🌍️ International

• U.S. stocks soared on Thursday following the Federal Reserve's unexpected 50 basis point interest rate cut, marking the first reduction in four years. Positive jobless claims data further fuelled investor optimism, with tech stocks like Nvidia and AMD seeing significant gains. Financial and industrial sectors also benefited from the lower rate environment, indicating a broader market rally.

US FEDERAL RESERVE

🇮🇳 Fed drops rates - here’s what it means for India

For the first time in four years, the US Federal Reserve slashed its benchmark interest rate by half a percentage point, the largest reduction since March 2020. 

Here’s the TL;DR:

• The rate cut lowers the Fed’s key rate to 4.8% from 5.3%.

• Inflation has dropped from 9.1% in June 2022 to 2.5% last month, nearing the Fed’s 2% target.

• The Fed projects another half-point cut this year and four more in 2025.

This move is expected to reduce borrowing costs for mortgages, auto loans, and credit cards, potentially boosting consumer spending and economic growth. Projections show:

• Inflation falling to 2.3% by year-end and 2.1% by 2025.

• Unemployment rising to 4.4% this year and staying at that level through 2025.

But none of this matters to you. So here’s what you really need to know.

• Following the Fed's announcement, Indian stock markets experienced a surge, with the Sensex rising over 700 points and the Nifty index surpassing 25,500. 

• Experts, however, warn of potential short-term volatility as investors adjust to global economic changes.

Now typically, a Fed rate cut boosts global liquidity, driving foreign capital inflows, including Foreign Portfolio Investments (FPIs) and Foreign Direct Investments (FDIs) into emerging markets like India, which offer higher interest rates than the US. 

These inflows can: 

1. Strengthen the rupee, 

2. Lower bond yields, and 

3. Make borrowing cheaper for businesses, injecting more money into the economy.

However, Economic Affairs Secretary Ajay Seth and Chief Economic Advisor Anantha Nageswaran downplayed the impact on India, suggesting that foreign inflows were already “priced in” (read: accounted for). 

There is also speculation that the Fed’s move could pressure the Reserve Bank of India (RBI) to cut its own rates, although RBI Governor Shaktikanta Das has indicated no immediate plans for cuts due to inflation concerns.

Overall: While optimism surrounds increased foreign investment and certain sector gains, opinions on the overall impact remain mixed. Markets will closely monitor further developments in US economic conditions and RBI policy decisions.

Read more: Economic Times

CORPORATE CULTURE

🧑‍🏭 Tragic death sparks debate on corporate work culture

The recent death of 26-year-old Anna Sebastian Perayil, a chartered accountant at Ernst & Young (EY) in Pune, has ignited a national conversation about toxic work environments in corporate India. Perayil passed away in July 2024, just four months into her first job at the global advisory firm.

The controversy began when a letter from Perayil's mother went viral, blaming "workload, new environment, and long hours" for her daughter's untimely death. This has led to calls for investigation and reform:

• NITES (Nascent Information Technology Employees Senate), an IT employee union, has demanded a thorough investigation into the circumstances surrounding Perayil's death and has formally approached the Ministry of Labour and Employment as well as the Ministry of Home Affairs.

• Rajya Sabha MP Saket Gokhale has written to Maharashtra’s Labour Secretary, urging an urgent inquiry into EY’s working conditions.

• Broader concerns have been raised about the practices in accounting and consultancy firms, including overwork, underpayment, and high-pressure environments.

EY expressed deep sorrow over the tragedy, reaffirming their commitment to employee well-being. The company acknowledged the family’s concerns and stated that they are committed to improving workplace conditions for their 100,000 employees across India.

Overall: This case highlights the ongoing challenges young professionals face in competitive corporate settings, sparking renewed focus on:

• Stricter enforcement of labour laws

• Improved work-life balance initiatives

• Enhanced mental health support in the workplace

• Greater transparency in corporate work cultures

As the investigation continues, this incident serves as a sobering reminder to prioritize personal well-being over professional demands and reinforces the need for corporations to place employee welfare at the core of their success strategies.

Read more: Economic Times

GENERAL OVERVIEW

🗞️ Bite-sized summaries

👨‍👩‍👧‍👦 23andMe board resigns - All seven independent directors of 23andMe resigned from the company’s board, leaving CEO Anne Wojcicki “surprised and disappointed,” as noted in a memo to employees. The directors had formed a special committee to explore ways to revive the struggling company, which has seen its stock fall over 95% since going public in 2021. Wojcicki had submitted a proposal in July to take 23andMe private, but it was rejected. The board cited a lack of progress and strategic differences with Wojcicki as reasons for their resignation. The company plans to search for new directors.

🧑‍🏫 More bad news for Byjus - Aakash Educational Services Limited (AESL), partly owned by BYJU'S, has laid off 80-100 employees, including senior and middle-level executives, as part of a shift to a new business model under its "Aakash 2.0" strategy. While AESL did not confirm the number, a spokesperson cited the introduction of new roles and consolidation of existing ones. AESL was acquired by BYJU’S in 2021, but the two parties have faced legal disputes. MEMG chairperson Ranjan Pai has since emerged as the largest shareholder of Aakash, now owning 40% of the company, with plans for further growth.

HEADLINES

🧑‍🍳 What else is cookin’?

What’s happening in India (and around the world 🌍️)

• Boeing starts furloughing tens of thousands of employees amid machinist strike.

• Tupperware lifts the lid on its financial problems with bankruptcy filing.

• YouTube start MrBeast, Logan Paul, KSI team up to launch Lunchly, to rival Lunchables.

• Astronomers have spotted the biggest pair of black hole jets ever seen, spanning 23 million light-years in total length.

CULTURE

🍿 Entertainment, Entertainment, Entertainment

• Cricket: India bounced back from a shakey start on Day 1 of the Test series vs. Bangladesh.

• Champions League round-up: Leverkusen run riot, Barca beaten by Monaco. Scoreboard here.

• International Emmy Awards 2024: Aditya Roy Kapur and Anil Kapoor's The Night Manager nominated for best drama series.

• Ananya Panday's Call Me Bae renewed for season 2: "Bae is here to stay".

• Netflix's Black Mirror releases teaser for series 7.