The Russian stock market is not trying to actively grow
Because of fears of new sanctions from the United States, the Russian stock market is not trying to actively grow. Perhaps the new levers of pressure on Russia from the West will apply next week – it is connected with the question of Crimea. Therefore, domestic investors are trying to minimize risks.
Profit taking does not give the Russian stock indices to rise properly. Prices are under pressure because of rising oil stocks in the USA last week they rose by 2.8 million barrels. The export of crude oil fell by 506 thousand barrels per day.
Because of the uncertainty of the overall geopolitical situation in relation to the policy of sanctions against Russia and the global oil market, domestic investors will diversify their investment portfolios the following issuers. RPC UWC will continue to increase by +2,6%, “Mechel” will add +1,6%, NLMK will rise by +2,1%, “Tatneft” – on +1.8 percent, “RussNeft” – +1,9%, “Aeroflot” will add another 1.2 percent. “Yandex” continues to grow and will increase by +2.8% and Severstal will grow slightly by 0.5%, “M. Video” is at +1.3 percent. “Sberbank” has a good potential of growth to +2.4% and LUKOIL will continue to increase by +2.8% in the medium term.
The ruble weakened slightly after recent strong growth. The fact that the dollar strengthened today in early trading in Europe – the signs of global economic weakness are pushing to retreat from riskier assets. Meanwhile, the British pound remained stable after the turmoil on Brexit, which again have not created clarity for the UK.
US stocks were lower after the close on Wednesday due to losses in the sectors of healthcare, technology, oil and gas. At the close of the NYSE Dow Jones industrial average lost 0.13 percent, the S&P 500 index – 0.46 percent and the NASDAQ Composite was 0.63%. US stocks on Wednesday weakened as the yield on Treasury bonds fell again, and prolonged inversion of the yield curve made the panic that economic growth in the U.S. slows. The benchmark yield on 10-year Treasury bonds fell from 15-month lows, investors were still focused on the stinginess of the Central Bank.
The yield curve inverted for the first time since 2007. If the inversion persists, this may indicate a recession is likely in one to two years. Shares fell and the financial S&P 500 index, which declined by 0.4%. Inverted yield curve – this is what worries investors, which is why they open sale. This is definitely slowing economic indicator, whether it goes into recession or not, nobody knows. But it will put the market on pause.
Worries about global growth recently has intensified due to weak economic data. The Federal reserve last week refused to projections of any interest rate hikes this year. The European Central Bank, which postponed a planned rate hike amid threats to growth.
Lennar (NYSE: LEN) rose by 3.9% – the company expects improvements in the housing market. At the same time, a 2.7% increase in shares of KB Home. The insurance company Centene (NYSE: CNC) fell 5% after it announced the purchase of its competitor WellCare for $15,27 billion But shares of WellCare jumped by 12.3%.
“International financial center”