The external background before the start of trading in Russia is positive. Oil and industrial metals are becoming more expensive. Asian indices are mostly trading in the black. The growth of US Treasury yields in the market is perceived as a temporary phenomenon.
During the day, the situation may change significantly, as numerous speeches of the Fed representatives are scheduled for Tuesday. In general, the strategy of betting against money remains the main one in the markets and deltamarket. For the Russian investor today, it is worth paying attention to the final estimate of inflation for December.
The Board of Directors of LUKOIL will review the results for 2020 and announce plans for the new year. The Moscow Exchange will report trading volumes for December. MMK shares will be traded on the last day with a dividend of 2,391 rubles per paper.
The financial sector remains a growth area.
At the end of trading on January 11, the Mosbirzhi index rose by 0.8% to 3,482. 48 p., while the RTS remained at 1,466. 56 p. During the day, the MOSBIRZHI index rose to the level of 3516.9 points, which is a historical high. The external background did not contribute to growth, but there were internal corporate news that could distract investors ' attention from the negative. The volume of transactions on the main section of the Moscow Exchange amounted to 143.292 billion rubles.
Three sectors closed the day in the red, and five in the black.
The strongest growth was shown by financial (+1.4%), but telecommunications declined by 0.54%. Metals and mining were also in the red (-0.27%), which was quite similar to the dynamics on European markets. According to Mikhail Shulgin, Head of Global Research at Otkritie Broker: "Technically, the Russian market looks very overbought at the moment. Relative strength index (RSI with a period of 14 days rose to almost 80 points).
The indicator was last higher in January 2020, just before the coronavirus became the reason for the correction, which turned into a collapse. We do not rule out that news during the corporate reporting season or rumors about new sanctions may soon become a reason for a market correction." Similar expectations are increasingly heard in relation to foreign markets, which not only passed the period of the Christmas rally, but also very strongly entered the new year.
The main providers of positive news were financial organizations.
TCS Group (+1.5%) plans to change the capital structure, which will reduce the share of Oleg Tinkov from 84% to 35%. Sberbank rose by 1.84% on the news about the interest in buying the electronics seller Citylink, which will contribute to the expansion of the corporation's ecosystem. The leader of the day was RusHydro shares (+3.69%). According to the business plan, RusHydro expects to increase its net profit under IFRS by 43% to RUB 47.86 billion in 2021. Revenue in 2021 should be 456.6 billion rubles, EBITDA-107.39 billion rubles. At the same time, the debt-to-EBITDA ratio will reach 2.4 x.
According to Alexey Pavlov, chief analyst for the Russian market at Otkritie Broker: "When drawing up a business plan, management traditionally follows a conservative scenario, and therefore the absolute value of profit on paper and in life can vary greatly. In our opinion, the dynamics are fundamentally important here, as well as another confirmation of the fact that at least in the next two years the company is not expected to have large paper write-offs, which for many years have greatly damaged RusHydro's consolidated net profit.
And this is important, because 50% of the profit under IFRS goes to dividends." RusAl (+2.68%), Sistema (+2.25%) and Sistema (+2.25%) also showed significant growth in the Moscow Exchange index. Mail.ru Group (+1.98%). NLMK (-2.99%), Petropavlovsk (-2.15%), Severstal (-1.94%) and Tatneft (-1.12%) were the weakest.
The ruble is weak along with other commodity currencies
The ruble showed weakness during the day, reaching 75.0 per dollar and 91.11 per euro at the moment. It did this together with other commodity currencies like AUD and NZD, which lost more than 0.7% against the US dollar in the evening. The dollar index eased slightly in the afternoon, but was still up 0.35%. The concern is the growth of yields on US Treasury bonds. In particular, the yield on 10-year securities has already increased to 1.13%.
This is due to the statements of the Vice-Chairman of the Federal Reserve Richard Clorida, who noted the lack of immediate plans to increase quantitative programs. On the other hand, this situation may be temporary. The Fed has repeatedly hinted that there should be fiscal measures first, and then the Fed will have its say. The ruble is also negatively affected by the uncertainty of the future American foreign policy. The democratic consensus in Washington hints that not only economic measures, but also any actions in the foreign policy direction are waiting for quick approval. By Monday evening, the dollar was up 0.68% at 74.66 and the euro was up 0.22% at 90.80.
Twitter punished for blocking Trump's account
US indices started the new week with a fall. In the market environment, there are opinions that stocks have risen too far and too fast. In fact, this growth is largely supported only by the Fed's incentives and promises to keep the rate near zero. The political situation also does not add to the optimism. Democrats in the House of Representatives have initiated impeachment proceedings for Donald Trump, although his term as president remains just over a week away. Of course, the markets are waiting for statements about new stimulus programs from President-elect Joe Biden, but the ones already adopted could only keep the economy from collapsing. Joe Biden himself has received a second dose of the coronavirus vaccine, and the FBI is warning of future armed protests. However, it is unlikely that anything is already able to prevent the inauguration of a new president.
Behind the political veil, there are very strong movements in the market.
Tesla shares fell 7.82%. The day before, we wrote that the share price per profit indicator exceeds 1700. Moreover, the share price index for cash flow is close to 90, which can hardly be justified by huge hopes. In any case, the electric car market may be very competitive. Apple (-2.32%), according to information in various media, is negotiating with companies such as Daimler, Hyundai Motors, etc. about the creation of an alliance for the production of electric vehicles and the development of autopilot technologies. In the securities of Twitter, a drop of 6.41% after the company blocked the account of Donald Trump, which is subscribed to by almost 89 million people. Boeing shares fell by 1.48% on the news of another plane crash, but this time the B737-500 in Indonesia. The biggest declines were in the durable goods (-1.89%), real estate (-1.66%) and communications (-1.76%) sectors. The growth was best reflected in the energy sector (+1.62%). In the S&P 500, Eli Lilly and Co. (+11.74%), Biogen Inc. (+5.93%) and Walgreens Boots Alliance Inc. (+5.51%) were the strongest performers. The leaders among outsiders were Tesla Inc. (-7.82%), Twitter Inc. (-6.41%) and DexCom Inc. (-4.5%).
At the end of the day:
DOW JONES 3,1008. 69 p. (-0.29%),
NASDAQ - 13036.43 p. (-1.25%),
S&P 500 - 3799.61 p. (-0.66%).
Quarantine is China is not afraid
Asian markets are also experiencing post-holiday enlightenment. We noted that the South Korean KOSPI rose by 10% in the first week, but on Monday it lost 1%. At the auction on Tuesday, the correction only intensified. In Japan, on the contrary, the market reacted to the weakening of the yen. If the yen spent last week closer to the value of 103 per dollar, then this week it is trading around 104 per US currency. However, it is worth noting that in the Japanese market, the shares of pharmacists were in high demand on the news about the next experimental drugs against COVID-19. In China, where the market was a little afraid of the quarantine in Hebei Province the day before, they still understand that 103 cases per 1.3 billion people are far from the American morbidity statistics. On the other hand, Malaysia on Tuesday declared a state of emergency with total quarantine in several parts of the country. U.S. Treasury yields continued to rise. For 10-year obligations, it reached 1.15%. Against this background, the dollar index added about 0.12% to 90.57 p.
By 8: 40 GMT:
NIKKEI 225 - 28214.65 p. (+0.27%),
Hang Seng - 28087.82 p. (+0.64%),
Shanghai Composite - 3,570. 25 p. (+1.10%).
US oil stocks may fall for the fifth week in a row
Oil was trading in a small plus. Concerns about current demand persist, but the future no longer seems so bleak. A number of countries are accelerating the coronavirus vaccination process. Even US President-elect Joe Biden has already received a second dose of the vaccine from Pfizer. In the short term, oil is supported by expectations for reserves. According to preliminary data from a Reuters poll, the market is waiting for a drop in US oil reserves for the fifth week in a row. Goldman Sachs has improved its forecast for the price of Brent, expecting it to rise to $65 in the summer, and not at the end of 2021.
By 9: 00 Moscow time:
Brent - $55,85 (+0,34%),
WTI - $52,48 (+0,44%),
Gold - $1858.3 (+0.41%),
Copper - $7956.51 (+1.25%),
Nickel - $17,445 (+2.10%).я
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