Stock markets: Investors are leaving the auction on the background of overall uncertainty

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The Russian stock market opened today is neutral. In the past week, the oil and gas sector came under pressure as investors took a pause and evaluate the possible risks associated with the question of compliance with earlier agreements of the OPEC countries+ since the beginning of 2019. In this regard, we observed the lack of interest by investors in such companies as: “LUKOIL”, “Rosneft”, “Tatneft”, “Gazprom” and “Gazprom Neft”. In the mining and metallurgical industry was a notable recovery of investment was the company “Mechel”.
With regard to the shares of the company “RUSAL”, after the decision by the US on the removal of all possible sanctions, the company shares increased by a total of +25%. But it had no positive effect on Russian stock indexes. Since the beginning of 2019 OPEC+ will have to significantly reduce oil production in the framework of the agreements as a whole at 1.2 million barrels per day. While the prospects for oil and gas companies will be significant.
Company “Rosneft” can increase investment to 1.2-1.3 trillion rubles in the period 2019-2020, the Board of Directors of “Rosneft” to evaluate the performance of the company for the current year, and determine the prospects for 2019. Will pay attention to strengthening the competitive position and the development of technological capabilities. Because of the General uncertainty of the situation investors reduce risk and maximize use of Delta neutral hedging strategies in their investment portfolios.
Wall Street continued to decline. Almost 300 stocks from the S&P 500 index changed the trend on the downside. Many major market participants realize that the fed is quite pragmatic in relation to the stock market. There is real concern that the reforms of Donald trump in the future will not be able to provide a high rate of economic growth, while debt under the tax reform will continue to grow. Investors to minimise the risks assess the company from different sectors and choose the most promising.
McDonald’s (NYSE: MCD) and Chipotle Mexican Grill (NYSE: CMG) are two of the most successful concepts restaurants in the world. But which stocks are the best investment today? Competitive strategy McDonald’s has long positioned itself as a provider of fast, affordable and convenient supply. In turn, McDonald’s is a low-cost provider in the industry, in which price is of great importance. Chipotle, on the other hand, is trying to differentiate themselves with quality.
Despite the fact that speed and value are still important in space fast food, Chipotle has proven that consumers will pay more and wait longer to get better food. McDonald’s has focused its attention on the modernization of the restaurants, as most of the shops already built. The company is also in the process of reorganization of its stores, with more than 90% of its stores owned by franchisees, McDonald’s has now become a much more active business.
In turn, it is very profitable, with an operating margin over 40%, thanks to revenue streams based on royalties and rents. On the contrary, Chipotle owns and operates its restaurants. It gives him more control over the operations and investment growth, albeit with higher capital requirements and, consequently, higher overall risk. Overall, although both chain restaurants have proven business models, the approach McDonald’s based on the franchise, making it more stable and less risky investment. In this regard, since the beginning of 2019, the company will continue to enjoy success among investors and growth of the company’s shares will continue.
Gaidar Hasanov
“International financial center”