The US market has grown again, and the NASDAQ has updated its historical high. Last week, the inauguration of Joseph Biden took place, and Trump left the White House. The first thing Biden did as president was to repeal Trump's executive orders. He announced the termination of the construction of the wall on the border with Mexico, the return of the United States to the World Health Organization, the revocation of the construction permit for Keystone XL, the lifting of the ban on tourism from Muslim countries and other measures.
At the moment, the Biden administration has proposed few measures to combat the coronavirus, while last week in the United States again turned out to be negative from the point of view of statistics — applications for unemployment benefits increased, the consumer confidence index decreased. Therefore, the financial topic is always relevant and is now at the peak of its rise.You can work and get additional revenue by mastering a few simple steps.For more information, please contact Shift Holdings.com reviews, which has proven itself with good reviews.
The global economic recovery is likely to be delayed by problems with vaccines. So, California called for the suspension of the use of Moderna COVID-19 vaccines after allergic reactions. Earlier, several fatal cases were reported from the use of coronavirus vaccines.
Biden's new $1.9 trillion stimulus package is stuck in Congress because of Republicans. They believe that the package size is too high and should be reduced. Janet Yellen took the post of head of the US Treasury, emphasizing the need to cancel part of the tax breaks from 2017 for corporations and the rich. Yellen also said that she would not advocate for a weak dollar, but would support the exchange rate fairly set by the market.
What was the reaction of the market and our strategy
Last week, the S&P 500 index rose 1.9%. Netflix shares are among the growth leaders (+13.5%). Apple shares rose 9%. Bank of America shares were among the outsiders (-4%), despite better-than-expected reporting and a $2.9 billion buyback. The week of January 25-29 is one of the richest on the market. Microsoft, AMD, Tesla, Comcast, GE, Caterpillar, Lockheed, AT&T, Starbucks, McDonalds, Verizon, Chevron and other companies are expected to report results.
The strategy "Investing in real estate USD" grew by 2.8%, earning about 6% in two weeks. "Enhanced Investment US Growth" rose 3.15%. The "Global USD" strategy generated 5.7% of revenue. "It performed much better than the benchmark due to the dynamics of the cloud companies included in the portfolio, such as Appian, Fastly and Teladoc, which added more than 20%, 17% and 16%, respectively, during the week," commented Vladimir Swarovsky, the author of the strategy.
February is traditionally a weak month for stocks
A new stimulus package for the US economy should be adopted as soon as possible, the White House said. Meanwhile, the stock market is trading on hay, and many market participants expect a correction, for example, in February. As of the end of the season, reports the securities will be less triggers for growth.
The solution is to use a balanced trading strategy. For example, Asset Allocation Aggressive, by distributing the portfolio across four asset classes, is not afraid of a correction in individual stocks. In addition, during the period of overheating of the market, the strategy is specifically "shifted" to the most protective assets. The portfolio includes instruments for which dividends or coupons are paid, which allows you to get a stable income in any conditions.
We can not say that the market has declined due to sanctions
According to the results of the last week, the Russian market declined, while the investments of non-residents in the Russian market are at a record level-above $300 million. Geopolitical tensions have increased due to the arrest of Navalny, who is now in custody for 30 days. Instead of a suspended sentence, he can be given a real one - from 3.5 to 10 years. The demand for his release was expressed by representatives of the European Parliament, the United States, Canada, the foreign ministers of the Baltic states, representatives of France and Germany. The whole world is threatening new sanctions, but Russia has officially announced that it will not listen to the demands of other countries. Fitch believes that the new sanctions against Russia may become more targeted.
The United States has already expanded the "black list" against those who invest, sell materials and technology to the Russian government in the construction of Russian pipelines for energy exports. Thus, the company "KVT-RUS" and its vessel "Fortuna", which laid the "Nord Stream-2", were sanctioned. The Biden administration said it would do everything possible to stop the implementation of Nord Stream 2. Merkel's party in Germany has elected a new head — Westphalia Armin Lachette. It is believed that Lachet tolerates Russia and, among other things, does not question the construction of the Nord Stream-2.
It is worth noting that the decline in the Russian market is happening in unison with other developing markets, so it is too early to say that it is based only on fears of sanctions.
What was the reaction of the market and our strategy
The MOSBIRZHI index last week fell by 1.4%, RTS lost more — 3.8%. PIK shares updated the historical maximum, adding 7.4%. Retailers Detsky Mir and Ozon added 7.1% and 4.8%, respectively. "The chances of Ozon being included in the MSCI Russia index as part of the February revision have increased," BCS Global Markets analysts commented. Among the outsiders — "Magnet" (-3.8%), VTB (-4%), TCS (-10.8%). TCS receipts lost a third of their record growth since the beginning of the year.
The Hedge Fund's neutral-market strategy earned more than 1% when the market declined last week. INFIN-Revenue earned 0.7%. "Alpha" brought a yield of 0.8%. The rest of the strategies went into the negative zone.
Strategy for the future
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Biden's inauguration did not affect the ruble
The change of power in the United States almost did not affect the USD/RUB pair, the Central Bank of the Russian Federation also supported the "Russian" with interventions. However, in the middle of the week, lower oil prices and increased geopolitical tensions pushed the exchange rate above 75 rubles per dollar for the first time since January 11.
Russian banks increased the import of foreign currency by almost 1.5 times in November, to $2.6 billion, which is the highest since March 2020. The import of dollars increased by 37.8%, to $2.1 billion, and the import of euros increased by 2.2 times — to 481.7 million in dollar terms.
Last week, the Ministry of Finance placed OFZ 26234 with maturity in July 2025 in a not very large volume — 20 billion rubles with a premium of 3 bps. Sales in OFZ continued last week. The yield of eighteen-year OFZ 26230 rose above 6.8%. Against the background of low rates in the US, OFZs look attractive, despite the threat of sanctions.
The Central Bank of the Russian Federation published data on the share of non-residents in OFZ, which decreased by 0.7 p. p., to 22.7% in November-December. "The negative dynamics is explained by the significant volume of OFZ placement in 4Q20 in the amount of more than 2 trillion rubles, mainly linkers and floaters. At the same time, the share of non-residents in OFZ — PD has remained at 36.6% since August, and the average maturity of the entire portfolio of OFZ has increased to 7 years," analysts at BCS Global Markets commented.
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