US bond yield curve has inverted - canary in the coal mine? Boeing tests updates to 737 MAX 8, gets tentative approval from FAA. RBI to issue guidelines for Fintech companies, proposes “regulatory sandbox”. Apple announces streaming service, credit card, and gaming offerings.
Moving on to the top Business stories of the week.
US bond yield curve has inverted - canary in the coal mine?
Flipped Over: The yield on the US 10-year Treasury note on Friday dipped below the 3-month yield. It was the first time since mid-2007 that the yield curve — which plots bond yields from shortest maturity to highest and is considered a barometer of economic sentiment — inverted.
Time to Worry: The inversion has got investors across the globe worrying, wondering if this could mean the slowdown of the US economy.
Read more on the inverted yield curve and what it means here.
Again?: Global stocks are tumbling as bond markets in the US are flashing an inverted yield curve, considered a harbinger of a looming recession.
No Worries: While the possibility of a recession in the US is worrisome for the global economy, economists and analysts say Indian stock investors need not worry much. Find out why.
Boeing tests updates to 737 MAX 8, gets tentative approval from FAA. Airfares likely to stabilize.
Updates: Boeing is testing changes made to the Maneuvering Characteristics Augmentation System systems (MCAS) of its 737 MAX 8 aircraft. The changes were made, to decrease the chances of triggering the MCAS, which is believed to have been a factor in both the Lion Air and Ethiopian Airlines crash.
Sample Space: Pilots and training officials from three American carriers - Southwest Airlines, American Airlines and United Airlines, along with two smaller non-US airlines, ran simulated flights designed to mimic the scenario that had brought down the Lion Air flight in Indonesia last year, using the current and updated software.
All Clear: Each pilot using the flight simulator landed the plane safely.
Getting There: The Federal Aviation Administration(FAA) has tentatively approved the updates released by Boeing in order to fix the faulty MCAS system in their 737 Max aircraft. FAA’s approval of the new safety update could make the aircraft viable again.
The Fix: The new system is designed to push the plane's nose down for no longer than 10 seconds in the event of a detected stall. The revamped planes will be outfitted with two sensors on the plane's nose, rather than one, to counteract the possibility of faulty information triggering the MCAS system.
Return to Form: Airfares are likely to stabilize in the coming weeks as Jet Airways prepares to return to service, leveraging the INR1,500cr of interim finance received from lenders to partly clear pending dues. This will allow Jet to re-deploy several of its grounded aircraft back into its network, helping renew many of the routes it had temporarily suspended.
Handicapped: Airfares have risen in recent weeks on account of flight cancellations arising from a host of factors including the grounding of Boeing's 737 Max 8 aircrafts, along with cancellation of several international flights on account of restrictions on using Pakistan airspace by commercial airlines.
Instant Relief: Jet restoring part of its fleet and SpiceJet leasing some of Jet's grounded planes will address the airline industry's recent capacity reduction at a time summer travel requirement is on the rise.
RBI to issue guidelines for Fintech companies, proposes “regulatory sandbox”.
New Rules: RBI is set to issue guidelines for fintech companies to test their new products on a small group of users before scaling up. According to the RBI the “regulatory sandbox” will help fintech companies launch innovative products at a lower cost and in less time.
Trial Version: The sandbox will enable fintech companies to conduct live or virtual testing of their new products and services. The limited launch will also enable them to test the viability of the product without a wider and expensive rollout.
According to NITI Aayog, India is one of the fastest growing fintech markets globally, and industry research has projected that $1tr, or 60% of retail and SME credit, will be digitally disbursed by 2029.
We Told You So: “Digital lending, payments, cryptocurrencies, and the underlying blockchain are all nascent industries with the potential to permanently alter our financial ecosystem. However, considering their technological backbone, the regulator would always play catch-up to understand their ever-changing nuances to figure safeguards. The solution to this quandary may be to consider a regulatory sandbox, rather than blanket bans and restrictions. ”Read our article to know how a regulatory sandbox could be the answer to the government’s quandary with technology.
Mindtree Directors to hold discussions ahead of the board meeting. CEO assures stakeholders.
Strategic Time Out: Independent Directors of Mindtree will meet on Tuesday ahead of the company’s board meeting to advise its board on whether to proceed with the share buyback proposal and further consider L&T’s offer to buy shares from the company’s public shareholders.
Second Attempt: Today’s meeting comes after the Board was unable to reach a decision over the buyback proposal on March 18.
Earlier: L&T had agreed to buy Café Coffee Day founder V.G. Siddhartha’s 20.32% stake in Mindtree for INR3,269cr on March 18, further announcing plans to buy a total of 67% in Mindtree for roughly INR10,700cr.
United we Stand: Mindtree CEO Rostow Ravanan in an interview said that all the company's independent directors are aligned with the approach that Mindtree will resist the “unsolicited bid” that has come from L&T adding that the company would uphold the interests of all stakeholders.
Read excerpts from the interview here.
Apple announces streaming service, credit card, and gaming offerings.
Change in Perception: Apple, in a bid to reintroduce itself as an entertainment and financial services company, has announced a streaming television service, a credit card, and an online gaming arcade.
At Long Last: Apple unveiled its much-awaited streaming service offering that includes two different services Apple TV and Apple TV+.
The programming will come through a revamped television-watching app for users of Apple’s 1.4bn gadgets worldwide, as well as owners of smart TVs and other devices.
Also: Apple also introduced a credit card, a digital video game arcade, and added hundreds of magazines to its news app.
Different Approach: Apple is taking a two-pronged approach to its streaming service offerings with Apple TV and Apple TV+
Completely Different: Apple TV is a TV Channels interface bundling other streaming apps and networks within its TV app while Apple TV+ is a service featuring a slew of star-studded original shows and movies.
Read this article to find the full list of content coming to the new streaming service.
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