Markets. Forecasts for the week
I’ll start with something more understandable to me, with gold. The maximum of gold quotes was set at the beginning of August last year, and after 6 months its decline is still perceived by the majority as a correction. But a correction of this duration is most likely an independent trend. The trend tends to end when the majority of market participants believe that it will continue. Do we read that the decline in gold is for a long time? These false judgments are enough for me to keep a short position in gold, however small. In order to reduce the latter to the area of $ 1,600 / oz.
I would also refer OFZ to relatively predictable instruments. I spoke about the fact that Russian government securities are near their local minimums a week or two ago. True, the lows were later and lower. But I propose to look at this from the standpoint of simple stock exchange logic. The yield on 10-year bonds is 6.5%, the “long end” has almost reached 7% per annum. This is accompanied by a spike in inflation (5.2%) and a statement by the Bank of Russia about the end of the monetary policy easing cycle and the key rate cut. On the one hand, the decline in OFZ is justified. On the other hand, the factors of pressure on their quotations are in the prices of quotations. The purchase has become safer and more speculatively justified.
The ruble and the domestic stock market, it seems to me, have not yet shown their maximums. Although against the background of the unidirectional movement of oil and the American stock market, they are becoming more risky. Because if oil and America are at the home stretch, its completion is a stop for Russian stocks as well. And stopping is rarely equal to standing still.
As for oil, it would continue to wait for growth, similar to its own expectations last week. But with an increasing risk of a sharp correction. Surely, the correction here is not a matter of the coming week. However, it may start as early as the end of February.
The growth of US stock indices until about the middle of the 1st quarter was predicted back in November, with some reservations along the way. It would be foolish to show integrity and say that growth is over. The chances of its continuation in the new week are higher than the chances of a noticeable correction. But making plans for the week ahead in the framework of the super-trend that we have in the S & P500 or NASDAQ is shallow. Fundamentally, the growth we see is a direct consequence of the emission of money. The inflow of money into stocks is historically the highest. Supporting the growth that we are seeing in the United States and on the global stock map in its current phase and at current valuation can only be through an even greater inflow of money. It is doubtful that this logic of money movement and price support can last. The first quarter, as I see it, will remain the most favored time for equity investors. And, I think, the time of peak stock prices.
On the charts:
– index of net prices of government bonds
– dollar / ruble pair
– RTS index
– Brent oil
– S & P500 index futures
Sources: profinance.ru, moex.com
Not investment advice.