The stock market gave a chance to investors to earn
Partial government shutdown in the US, which remains one of the main pre-new-year stimuli the global markets yesterday continued for the fifth day without any signs of a breakthrough, and hundreds of thousands of American Federal workers felt that it smells like a protracted confrontation. According to representatives of the Republican party in the Senate, President Donald trump and the democratic leadership of Congress currently do not conduct direct negotiations. Discussion at the staff level continues, but there is no indication that the key participants in the drama are ready to reach an agreement. This is the uniqueness of the current shutdown.
The pressure on the ruble this morning completely ignored yesterday’s positive rebound in the oil caused by the improvement in investor sentiment after assurances trump on his Twitter feed before a flash visit to Iraq that the resignation of Finance Minister Mnuchin and fed Chairman Powell are not planned and Mnuchin generally called “good smart guy”. Over the last few months, oil prices fell from $85 to $50 per barrel for Brent, but today barrel of Brent blend rose to $54,11 (as of 12:00 GMT) after reaching a low of $50,34. Recall that the conservative scenario of the Ministry of economy implies an annual average price of a barrel around $56.
Someone jokingly said that “the best option is oil at $39, then the budget rule and nothing will go abroad,” shale producers are guaranteed and finally leave the market, but the Russian budget at the same time, it might still stand.
Meanwhile, at yesterday’s auction the Euro for the first time since September 18 exceeded 79 rubles – although after that the American session on cross-rates dropped to 78, what today many of the media. As in the case of a dollar a pair, in tandem with the Euro the Russian currency also weakened today with the opening of the exchange until 78,57, which, however, significantly better than our forecast in the January holidays at the level of 79.60-79,90 in tandem with the Euro.
Meanwhile, housing prices in the largest US Metropolitan areas in October, according to a report released yesterday Case-Shiller, showed again a stable increase compared with the previous month by 5.5%, repeated that the September figure. Although these data are in the rear view mirror compared to some of the indicators, which is closely watched by economists and investors, they are one of the most reliable and least likely to be revised over time. Las Vegas was the best in the ranking of 20 cities, where prices grew by 12.8% yoy. Second place went to San Francisco by 7.9%, showing a significant drop from the first lines of the rating.
Speaking about yesterday’s stock rally in the U.S. and about how large the chances of its continuation, the question is whether the valuation of shares attractive enough to compensate for all the negativity that fully poured out on our heads in the last months of the year. We traded the last full week in 2018, and we do not see that trading volumes would contribute to a clear explanation of reasons for possible reversal. Therefore, all other things being equal, let’s call it banal rebound and the ability to close for many of us investors without the horrific losses that they “gave” Dec.
“International Financial Center”