Stock market: risk of new trade wars are growing every day

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The Russian stock market may get support from the oil market, but investors still remain nervous. The threat of tightening trade wars between the US and China again makes major market participants to revise their investment ideas to invest in less risky assets. The United States will be a key source of energy supply to meet growing demand worldwide, as it is expected that innovations in technology and financing will increase production of oil and gas in the United States in the next decade. In the short term, this means that the United States can double production, double the export capacity and to introduce new products.
The price of Brent crude fell on Tuesday, due to ongoing weakness in global stock markets and signs of rising global supply, despite the impending sanctions on the export of crude oil to Iran.
There are two reduce pressure on global growth of oil demand: one of them is high oil prices, and in many countries they are directly related to consumer prices and the second is a slowdown in the global economy. Oil also was weighed down by signs of rising demand from the leading manufacturers. The commitment of Saudi Arabia for the production of more oil and scatter on the stock market dramatically reduced the concern about the introduction of the November 4, US sanctions against Iran.
Russia also indicated that it would provide enough oil to meet demand as soon as US sanctions hit Iran next week. In a sign that oil supplies remain adequate, despite a looming US sanctions against oil exports of Iran crude oil of the three largest world producers – Russia, USA and Saudi Arabia – has reached 33 million barrels a day. This suggests that the sharp rise in oil prices we will not see. Therefore, oil and gas companies will be less the interests of investors, especially for short and medium term transactions.
The us stock market is the most active due to the large involvement of major investors and optimism about the future and stable development of the U.S. economy. One indisputable fact supported the last stage of a long-term bull market of the USA: “Paying growth stocks at any price has paid off.” Index Russell 1000 growth (RLG) that displays stocks that are trading at high prices relative to their income in October fell by more than 10%, which is the lowest rate since the financial crisis.
In the same period, the value index Russell 1000 (RLV) decreased by only 7%. This shift was commuted last week after a major loss of income reported by both Amazon and Google, has caused the biggest fall in stock prices.
One of the hallmarks of the current environment since the beginning of this year is that the Federal reserve seems more determined than previously to maintain high interest rates. Investor psychology shifted to the idea that the long-term yield increases. When this occurs, is an implicit negative for stocks with a large number of shares, which, as a rule, are in the category of growth. Along with fed rate hike, the problems investors have included slowing growth in China and a stronger dollar, which in turn infringes on emerging markets and corporate earnings for large multinational companies.
However, investors may miss profit, too much passing in the value if the pendulum leans back, before the cycle starts to run. The focus of investor attention at the moment, shares of Walmart (NYSE: WMT) Inc., as the company will offer more than a quick check in their stores and simplify navigation using digital maps showing the exact location of the products. The company is preparing to capture a larger share of buyers during the festive season. The company’s shares confidently struck a price level of $100.00 per share, but at the end of the trading session, closing at $99,80. Today with the opening of the market if the stock stick above $100,00, the growth potential of securities could reach $150,00.
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Gaidar Hasanov
Expert
“International financial center”