With the right hope

С правом на надежду

Investing.com American markets the second day trying to grow, but it turns out with varying degrees of success and quite nervously. In General the June the situation is not good: every rebound ends earlier than the previous one, and the lows of the last week and a half become lower and lower. That is, of course, you can try to consider the ongoing sideways, but somehow it is a very big stretch.

And the beginning of the week there to change the trend, it seems, has not brought. Boeing (NYSE:BA) is pleased by the news of the resumption of tests of the model 737 MAX, Airbus, however, ruined the song, saying that in the next two years hopes to maintain production at 60% of previous plans and does not expect the normalization of the market by 2025.

The theme of trade conflicts not on the agenda: China today still adopted the law “on national security” that extend its right to intervene in the internal Affairs of Hong Kong in response to what the United States has canceled a special trading status of the city, provided, according to the White house, his role as a world financial center.

The power of coronavirus is also decreasing: ten million infected expected at the beginning of this week, but it had been Sunday, and the pace is not down. Director of the National Institute of Allergy and infectious diseases of the United States, “the main infectious diseases of America,” Anthony Fauci said today that the country is not in control of the situation with the virus and the daily increase in the number of cases could increase from the current 40 thousand to 100 thousand

Of course, the fed’s printing press proved their strength, but still it is expected that pumping money into the economy will not lead to real inflation – that is, the controller money to investors as would give, however not counting what they earned something extra to buy.

Today, in anticipation of a new invigorating words from fed Chairman Jerome Powell and Minister of Finance Steven Mnuchin index futures S&P 500 tried to break out of a downtrend, and almost made it – he’s grown to nearly 3075 p. However, after the beginning of the performance to 21.00 MSK, he slid to the 3060 p.

This tortured and fragile balance leads to paradoxical distortions of the market. “America can not take control of the pandemic, becoming the new epicenter of Texas, and not some distant countries, and in several other States talking about the extension of the quarantine – so, about the slow recovery of oil demand, says investment strategist UK “Arikapital” Sergey Suverov. – Some of the world’s strategists are talking about the “fully invested bears”: people, in General, negatively looking at the situation, but still sitting in the papers and even increase the share of risk, relying on fed. The reduction of the fed’s balance sheet started only recently, and, if the situation deteriorates, the fed will again begin to increase. Although the controller does not save the markets and the economy, but it is still a part of the injected money hits the market”.

Russian market and Bouncing person trying: RTS index following the results of day have decreased on 2,19%. Index Masuri – on 0,89%. The ruble also lead themselves in relation to the optimists is not very nice to 21.00 GMT, the dollar rose 1.22 kopecks to RUB 71,21

What is happening with the ruble and laws: tax period ended, and oil prices though have grown, but joy princet little. In July, the sale of foreign currency by the Ministry of Finance are expected to reach 110 billion rubles – that is almost half of June’s volume. Domestic economic news are reduced rather to estimate the final hole in the Russian GDP. The international rating Agency Fitchв Monday revised its forecast reduction in 2020 compared to may from 5% to 5.8%. By the end of 2021 is expected to increase – and forecast it revised, at first glance, positively, with 3% to 3.6%. The only problem is that the final result is still decreased. And good you can find here is that at the level of “slower growth reduction”: at the beginning of April, it is expected to reach 1.4% in late April has reached 3.3%, and now at the month of the expected failure increases significantly, but only by tens of percent.

With Fitch, and along with the Ministry of economy, suddenly not agreed by the head of Minpromtorg Denis Manturov: in his view, industrial production in Russia by the end of 2020 could decline by 8.6%, including in the treatment of 13.2%. It is clear that industrial production and GDP are two different things, but generally, the trend is comparable. For example, in the baseline forecast of economic development in 2020, industrial output should decrease by 5.2%, and treatment – and at 2.8%. But, again, there is good news: according to Manturov, the next year everything can recover. So it is not even clear what is better – to believe his assessments or not believe.

And if these scores can still change, the hole in the budget need to be patched now: today it became known that in the third quarter, the Finance Ministry intends to increase the supply of OFZ with 600 billion rubles from 1 trillion RUB.

From international news concerning Russia can be called the story of the financing of attacks by Islamists on the us military and the international coalition forces last year. It is an open question, but if this is considered true, then the consequences can be very serious. However, from the annexation of Crimea was expecting even worse results – but in the end still ended up being pretty vegetarian.

“We have, like last week continue to grow shares of retailers, paper, the X5 has grown on expectations of the II quarter of positive and increasing dividends, at the same time due to the ongoing environmental scandal continues to fall Norilsk Nickel (MCX:GMKN). PhosAgro (MCX:PHOR) increases production by 6% in the first half, and securities for the benefit of the seasonal growth of prices for fertilizers. At the same time, there is interest in protective assets – preferred shares of Surgutneftegas (MCX:SNGS), and characterized by high dividends to stock MTS (MCX:MTSS), – says Sergey Suverov. – The ruble weakened to below 71 per dollar, Russian market feels the impact of cooling prices on oil production in the U.S. is growing. They sell OFZ market is difficult to digest the increased supply from the Ministry of Finance. However, news is expected this week are few, and strong progress is also unlikely, the volatility is unlikely to be very large. Soon there will be consolidation above the 71.5 rubles per dollar and the RTS index, we also do not expect a correction, but rather sideways. Waiting for the corporate results of the II quarter prior to the publications less than two weeks, it will be interesting.”

(Text prepared by Daniel Zhelobanov)

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