TeleTrade: the great investment sharks are gaining optimism


Sentiment in global markets is still vulnerable as the conflict in Ukraine escalates.

However, according to TeleTrade analyst Ilya Frolov (, the cost of fuel as well as gold contracts and bond yields are the main influence, while the stock indices are relatively quiet.

Oil prices have soared nearly 15% since outright military moves began, reaching the highest values ​​since 2014. The North Sea Brent benchmark is consolidating above of $110 a barrel, as US and European consumers tried to seek other sources in the undersupplied market. . Many of them are forgoing deliveries from Russia, because it is difficult to reimburse such contracts while sanctions are imposed on Russian banks, moral problems are heightened and the pressure of world public opinion is made feel.

So the oil giants outside of Russia are on the safe side. Chevron stock jumped 3.97% to its all time high even after the oil giant raised its buyback program and the CEO’s forecast for operating cash flow through 2026 was released . Shares of ExxonMobil gained 0.96% yesterday despite the fact that they could suffer after their withdrawal from the Russian company Sakhalin-1, following the departure of British Shell and BP from Russia. BP was the biggest foreign investor in the Russian oil industry.

Gold futures saw limited upside gains as prices were near the technical resistance zone of $1950-1970 per troy ounce. From a fundamental perspective, the bullish moves in precious metals contracts may stall, while flagship companies in the global stock market offer a real chance to cover a sizable chunk of inflation-related losses. Many market participants are tempted by these opportunities despite the high risks.

Heading into the middle of the week, the Euro Stoxx 50 composite indicator was trading near the 3,700 area, which was last seen about a year ago. This price localization is around 15% below the levels of the first days of January 2022. The TeleTrade analyst considers that only a third of this correction could be attributed to geopolitical reasons, while the rest was driven by the short-term bearish mood ahead. monetary tightening by the main central banks.

There is too much uncertainty surrounding interest rate hikes by the US Federal Reserve (Fed) this year. The probability of a 50 basis point hike on March 16 has fallen to about 1.5%, from 34% last week and 60% just three weeks ago, according to Fed Watch monitoring tools. Potential action by the European Central Bank and other financial regulators is now pressured by expectations that the Fed is unlikely to raise interest rates as aggressively as originally planned, mainly due to side effects from anti-Russian sanctions. on the global recovery.

Expectations that monetary policy will remain relatively accommodative for some time, combined with a moderate drop in buying, are behind the rise in equities, with the Euro Stoxx 50 rising 1.75% on Wednesday. The U.S. broad market S&P 500 index rose again, 5.5% above the recent low on Feb. 24.

Banking stocks like JPMorgan Chase plunged to 52-week lows, Wells Fargo and Bank of America were hit as their earnings relied heavily on Treasuries with yields falling and international trading partially disrupted. However, while discussing Wall Street as a whole, it seems that the same big sharks are optimistic.

JPMorgan said in its note to clients on Monday that investors who sell stocks now are taking the risk of missing out on the rebound. “If you sell now on the back of the latest geopolitical developments, the risk is to be trapped… Historically, [the] the vast majority of military conflicts, especially if localized, have not tended to shake investor confidence for too long and would turn into buying opportunities,” the JPMorgan analysts wrote. At the same time, they warned that a rise in commodity prices could be a factor derailing growth, as “oil prices have so far risen less than expected.” Mislav Matejka, a Goldman Sachs analyst, said the war is unlikely to have a major impact on the global economy and the fundamentals that drive stocks.


The analysis and opinions provided herein are for informational and educational purposes only and do not represent a recommendation or investment advice from TeleTrade.

Ilya Frolov, Head of Portfolio Management, TeleTrade


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