Today, the bull has a chance of a transition to the consolidation and subsequent testing of an important level of 1,415 points
Results of previous day
Having lost its former prowess finally a day earlier, on Friday, Russia”s stock market is under pressure from external negativity continued to slide downward,1000reaching the beginning of the year.
RTS index fell by 2.67% to 1489.46 points, indexes MICEX and RTS Standard, respectively - at 2.15% and 1.78% to 9776.53 points and 1410.38 points. Trading volumes have increased slightly.
No sooner had investors worldwide, “digest” the euro area shaken by problems with servicing the debt of several countries and the threat that the People”s Bank of China following the publication of the last block statistics may already may soon benefit from a more formidable weapon to prevent overheating of the economy, higher interest rates, as they struck a new attack. Efforts nervousness in world markets, U.S. President Barack Obama, who presented the plan to reform the financial sector.
His suggestions are as follows: to prohibit any financial institution, which owns a banking license to trade on the stock market at its own expense, as well as direct investments in private equity funds and hedge funds. The main impact, therefore, focuses on six major banks in the United States - Citi, Bank of America, JP Morgan Chase, Goldman Sachs, Morgan Stanley and Wells Fargo, one way or another is involved in something that would boost the rally in markets. Also implies the introduction of a ceiling proportion of debt used to prevent excessive consolidation of the sector and the emergence of the problem of “too big, too fail”
receiving taxpayer-funded program of emergency assistance to the Federal Reserve and a bonus in the form of zero interest rates, the Big 6 was able to return due to speculation much of the money but never sent them on lending to the real sector of the economy, which is hardly like the U.S. president whose rating because of the half-effect “fire up” substantially reduced over recent years. In order to attract the lost of the electorate and bring things started to build a new financial architecture that he and his aides decided to go a step further introducing an additional tax for banks and to propose new measures, which otherwise would contribute to reducing risks in the system as a whole. In this regard, you can draw parallels with the Glass-Stegall Act, which operated since the end of the Great Depression until 1999, and prohibits banks combine lending, insurance and investment banking business.
consequence of this reform may be to reduce the presence of a number of major players in financial markets, the allocation to the subsequent sale of their structural units involved in investments at its own expense. Reflecting this may be an increase in spreads, which have a detrimental effect on the overall investment environment, as well as the forced sale of what is in these structures on the balance sheets. Along with this decrease the profitability of banks, and reduce the attractiveness of banks in the eyes of investors. An additional result may be the reduction of lending by banks and as a consequence of lowering the rate of economic growth.
Despite much radical change, will have to face the biggest players on Wall Street, reaction to these events may seem overly emotional. Firstly that the world needed a new financial architecture have immediately after it broke through the first “green shoots” post-crisis recovery. Even at a meeting in St. Andrews Chapter G-20 agreed that in 2010, this issue will not disappear from the agenda and will be followed up in future. The fact that the pendulum has shifted to a tightening of regulation, showed a 50% appeared WIDE taxes on bank bonuses (UK and France), the introduction of a “salary of kings”, the appearance of the first units of new standards of the Basel Committee on Banking Supervision. The fact that American banks over the clouds are gathering, it became clear even when there”s a U.S. deba1000te on the formation of a new regulatory body with greater authority than they do now have the Fed, as well as announcing the recent introduction of the tax calculated on the value of equity.
But in conditions of excess global liquidity, investors preferred not found in quotes such risks. Even after the appearance of information on the U.S. President”s willingness to make such a policy statement on the markets, relative calm reigned, which was broken only after the immediate start of a press conference, Barack Obama. Thus, the rule of “buy on the rumor (or in this case to sell), and fixed income on the fact that” there did not work.
Secondly why the market reaction may be emotional, and subsequently it will be possible to see the restoration of markets, as is the case with fears of default Dubai World, is an understanding among the establishment that such “surgery” is carried out gradually so as not to cause serious consequences. Not be ruled out that the initiatives of U.S. President will be subjected to the editorial board, and their introduction will be delayed in time. It has been stated, in particular the Chairman of the Committee on Financial Services House of Representatives, Barney Frank, who considered it reasonable to stretch the adoption of a plan for 3-5 years. To appease the markets and offered to U.S. Treasury Secretary Timothy Geithner, who noted that the words of Mr. Obama should not be seen as a threat to the division of Big 6 as well as an attempt to reduce the risks that threaten the financial system as a whole.
But in vain. After repeated failures to break through 1,150 points for the SP 500, many felt such conversations plausible excuse for profit-taking, which affected the dynamics of the world”s stock markets. The process of risk aversion did not affect the currency market, where currencies, funding for the carry-trade did not feel any special bonuses. Situation remained relatively calm and market US Treasuries, which may indicate the temporary nature of sales of shares.
In any case, Russia”s stock market, after less than 1460 points on the MICEX index still at the stage of technical correction, did not find the arguments to counter external factors. Increased his attitude and behavior of oil prices, which fell by the end of the day to a level of $ 75/barr. on the sort of WTI. Their downward momentum to resume the last data on stocks from the Ministry of Energy, the U.S., which upset the fall in oil due to low demand. Increasing the value of currency basket (35.42rub., 0.25 rub.) Held on Friday, may suggest that the portion of residents went to the market, however, an encouraging point was the recent data on inflows into investment funds which invest in shares of RF and CIS ($ 51 million)
Following the emotional sales in the first minutes of trading in future market tried to recover. But these attempts were quickly suppressed, that with a “bull” divergences on certain oscillator, demonstrating that buyers in the market has nothing to do. After the departure of below 1,415 points for the MICEX index afternoon adding new sales. In the future, “arrived,” and the disappointing retail sales in the UK (0.3% m /m, against expectations of 1.2% m /m). Unexpectedly, the positive data on promzakazam in Germany (2.8% m /m against the forecast 1.2% m /m) as well as some quarterly reports, which exceeded analysts” expectations, drowned in the general negative flow. Some special way, and said raising agency Fitch forecast of Russia”s credit rating to “stable” from “negative”. With regard to quarterly reporting, only General Electric and McDonalds have happy holders of its shares, while others are significant for the U.S. economy company, reported on Friday, -1000Schlumberger, BB T Corp, Capital One Financial, American Express, Kimberly-Clark and Google, are not able to please it. Where some analysts were overly optimistic projections, somewhere, even the reality of higher projections did not protect the shares from the sales, which says that at current prices is already incorporated all of these positive and to update the recent highs “bulls” will need to seek new drivers.
At the end of the day due reshivshimsya close their “shorts” bears, the market still was able to get a break and go back into the mainstream of the medium-term upward trend, conducted at the lows late last year.
The greatest losses in this case, as expected, occurred in the shares of the financial sector (Micex FNL -2.64%). Loss of other segments in descending order were: energy (Micex PWR) -2.57%, metallurgical (Micex MM) -1.52%, oil and gas (Micex OG) -1.49%. As a “safe haven” was the telecommunications sector (Micex TLC 0.03%).
look at today”s market
On Monday, Russia”s stock market will try to halt the rapid separation of accrued benefits from the beginning of the year. The success of this undertaking will depend on the stability of stock bull, which, after the beginning of trading should not fold and take advantage of lower price levels in order to bring the MICEX index above a minimum level of previous session (below 1400 points). In this case, they will have chances to move the market to consolidate and further testing of an important level of 1,415 points, a kind of servant Rubicon between the prevalence of pessimism and optimism in the market. If the bulls can not manifest themselves, the regime of free fall will continue, that will ultimately lead to the MICEX Index closing level of last year (1370 points), which has odds on the formation of the technical correction would be higher up.
Morning “blow” as a break down not less than 1% of market participants remaining in the papers have to keep because of continued with negative dynamics on Wall Street (SP 500 -2.21%). No sooner had the market participants to cope with their emotions after increasing the chances of higher interest rates in China and the introduction of more stringent rules of the game in the financial industry designed to reduce systemic risks, how to add a new cause for concern. As such, were raised doubts that Ben Bernanke will not be able to stay at the helm of the Fed for a second term. However, at the weekend a number of influential senators to dispel these doubts, which allows market participants to adjust to the formation of a technical rebound following a string of top-sensitive depressions on the spot market, according to the dynamics of the futures (SP 500: 0.51%). Major adjustments in this scenario can make today”s sales data in the secondary housing market in the 18-00 (waiting 6 million, before. 6.45 million). In Asia, nothing remarkable happens, clears the completion of trades in the states: Shanghai composite -0.71%, Nikkei 225 -0.74%, Hang Seng - 1.11%. In the currency market after the closure of Russia”s stock market on Friday the dollar against the euro weakened in the figure (1.4167), but the “shake up” the price of oil ($ 74.58/barr.) It was not possible.
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Analyst Ratings |
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