Finam experts are invited to attend a special webinar examining the risk of a global economic recession as a trivial matter. Meanwhile, it is high time to raise the share of the security, including gold. If a recession, when the wealth is sitting?
Olga Belenkaya, head of macroeconomic research at Finam, recalled that company auditors update instruments quarterly to protect against crises (high volatility) and high prices:
– We include gold, paper money, and floats among these assets. Therefore, the problem of protection against rising volatility can be solved by buying shares of the SPDR Bloomberg 1-3 Month T-Bill ETF, which focuses on short-term US Treasury bills (T-bills). The problem of interest rate risk can be solved by using an instrument with a built-in hedge against changes in interest rates – bonds with variable coupons, for example, Invesco Variable Rate Investment Grade ETF.
See our Q2 plan for a full list of apps. 2023. Natalia Malykh, head of equity research at Finam, adds that income for S&P500 companies started to decrease as of the second quarter of 2022, with the exception of the oil and gas sector, which has benefited from the energy crisis last year:
Based on the results of the first quarter of 2023, 7 of the 11 sectors may show a decrease in profits.
According to experts, there is absolutely no protection for wealth – even gold fell in 2008 yet. It is logical to reduce positions and returns to companies that are not self-sufficient and depend on external capital. Small caps have been relatively easy over the past year as if they are doing poorly, it may be difficult for them to refinance. , especially in small and regional banks. Causes and Objectives of the banking crisis in the United States
Andrey Khokhrin, CEO of Ivolga Capital, believes that the global banking system in its current form, controlled and monopolistic, may not cause any more problems, but will gradually cease to be a media system of wealth.
Finam considered the banking crisis as “a completely predictable effect of the monetary policy of the central bank of the world that is accelerating in relations. Evgeny Loktyukhov, head of economic and departmental research at PSB, agrees with his colleague that the international economic system in general has always become known for low-interest rates and lack of liquidity – and restructuring the brutality of the rules of the game. Don’t cause bottlenecks.
Will there be a recession or not? Olga Belenkaya recalls that the recession in the world economy is one of the conditions of development that may or may not happen:
For now, the baseline scenario is weak global economic growth in 2023-24, which does not rule out low-income damage in developed economies.
Ilya Prilepsky, the head of the international economy and economic experts, says that the recession is unexpected, although it is impossible to rule out a recession in the economy. and high growth (both sides of the fall) this year – accounts for the rapid recovery of the Chinese economy and the continuation of high growth rates in India.
The PSB and its colleagues argue: there are not enough conditions for a recession. There are no insurmountable problems either in the real sector or in the financial sector in general. At the same time, the short-term and shallow economy of developed countries, which is natural after the spread of the disease of many companies, seems to be:
We take this change of events as a reference example. Therefore, we look at the global stock market with a negative eye. First, developing markets, – said Evgeny Loktyukhov from PSB.
The expert admits “some other high-profile players among the players and the expected weakness in the Western economy in the middle of the year.”
Olga Belenkaya, on the other hand, remembers that the sudden emergence of the regulators made it possible to quickly stop the risk of developing system problems when the SVB money stopped.
This is evidenced by the gradual reduction in the volume of emergency lending by the Fed. At the same time, the issue related to banks is to identify the risk of interest due to the 500 bps of the Fed. for a little over a year, has not gone anywhere:
But the most serious risk that has not been realized is the credit risk because a significant increase in interest rates in such a short period of time is a problem not only for banks but also for those from who they borrowed.
Especially in the period of the slowing economy, the work is expected to tighten the lending conditions from the lack of housing. As a result, a new wave of confidence crises due to the collapse of the weak links of the American financial system cannot be stopped.
Which sectors are poised for significant growth?
In the next six months, Evgeny Loktyukhov will include consumer rights and therefore the production department focusing on the consumer market, as well as the part of goods, among these parts of the assets in abundance. There is little interest in universal computing.
– And if you want to make a lot of money right away, then I would suggest waiting for a new wave of failure (in my opinion, which is inevitable), looking for ideas that now do not exist power sector. In the same financial area, the analyst suggests.
Natalia Malykh refers to these areas as the electrical industry and consumer areas in China. The power industry will be boosted by the growth of energy consumption following the release of the lock and the introduction of new green capacity. The consumer department will react to the resumption of customer service. The retail market in China rose 10.6% in March (+7.4% expected), and consumer indices (daily production and demand) show weak strength, although these companies should see Profit growth is good in 2023.
Are US banks profiting from the crisis? Alexander Osin, an equity analyst at Ak Bars Finance, believes that the market is developing a situation where US banks, on the one hand, are benefiting from the stimulus program from financial leaders and increased economic activity against the background of “decreasing” policy.
Changes in the Fed rate. When the company faced a risk in the securities market, causing a loss of about $ 600 billion, the US Reserve System provided $ 143 billion to replenish the funds for the lending industry that was destroyed by the failure of Silicon Valley Bank and Signature Bank, an additional $ 153 billion.
Banks were given Under the discount window program, $11.9 billion is given under a new system to provide more money while reducing the size of bank deposits. In this case, the growth of assets and the balance of the Fed has resumed, since mid-March they have increased by 300 billion dollars.
We expect that based on the results of May-June, the JPM document and the main parts of the US region show a better strength than the market with a large forecast. The implementation of such a policy will lead to a culture of reducing the risk of investment and support in the emerging financial market sector. In this case, and with high risk, we expect a positive change in the index of the Moscow Stock Exchange in the future until mid-May. American market. Motion Vectors
I have a “bearish” vision of the market, and at best “centered” or the situation can go like the early 2000s and the rise of rates. Now, the economy is unstable, profits have decreased for many sectors (if you remove oil and gas from the collection). Therefore, I will reduce the situation in dangerous situations. Stocks are falling, but not as fast as markets can fall. The market is now funded by capital from debt markets. If investors trust the government bonds of developed countries as before, the disruption of the market will be great, – warns Natalia Malykh.
Evgeny Loktyukhov, on the other hand, expects the “seen” to come, moreover, very much:
But if you take the S&P500, it will probably be in the range. Return and slow growth, rather, the expectation of the end of this – next year.
Prospects for the Middle Kingdom
Olga Belenkaya hid the IMF figures. In 2023, China and India will account for 50% of global economic growth. According to Bloomberg calculations based on IMF forecasts, in the period 2023-2028, China will contribute 22.6% to global growth, India 12.9%, and the United States 11.3%. In the long term, India seems to be growing faster than China, mainly due to demographic factors (in terms of population, India has surpassed China, and it is expected that the composition of the Indian population will have a higher proportion of working-age people in the coming decades).
Dollar Outlook
According to Finam foreign exchange analyst Andrey Maslov, the US currency currently has about 58% of reserves and 88% of transactions. In 20 years, the share has been reduced by just under 20%, and business – by 5%, which, of course, shows the de-dollarization of the world economy, but it takes place very quickly pace tool.
Ilya Prilepsky says that about 50% of the value of global trade is paid for trading in “developed markets”, 35% – in blogs of developed countries, 15% – and the number of countries with emerging markets. The ratio of the latter is gradually increasing, and the yuan is probably the only candidate for the “household” model emerging in the stock market.
Oil. Prophecy
Oil prices have started to fall in recent days. What is the reason? According to Andrey Khokhrin, the long-term Brent price vector is falling. Natalia Malykh links the fall in oil prices in recent days to investors’ fears about the economy of developed countries:
“At the same time, we do not expect the price of oil to drop below $ 80 per barrel as the OPEC + action and finding more demand in China can lead to further shortages in the market. close to the second half of the yea.
In this case, we think that in the second half of the year, the average price of oil can be close to $90 per barrel. Ilya Prilepsky admitted that in the second half of the year, there will probably be a shortage in the world market, as well as creating upward pressure on quotations.
The ratio of gold to “golden”.
Andrey Khokhrin liked the translation that “gold is more likely to fall than to rise”.
Finam recalled its forecast for the second quarter of 2023, as gold will trade at about $ 1,800-2,080 per troy ounce – before the end of the year, the precious metal may try to rise, in the region of 2000 -2200. $. PSB’s Evgeny Loktyukhov considers himself to be in the optimistic camp for gold – he expects the price to rise to the region of $ 2250-2300 an ounce as the US economy slows down and the Fed decides discount rate:
We are looking at gold mining products very well – Polyus and Polymetal are attractive as long-term, winning organic growth ideas, incl. and the ruble is weak. We block Polyus – the current fair price is RUB 13,600. We recommend holding stocks of gold mining companies in the portfolio. In “Ak Bars Finance” note the reduction of risks in the monetary policy emphasized by central bankers.
Tatneft, Surgutneftegaz: safe haven to avoid recession? – All big companies in Russia, power, and state, are threatening. With the tank, I think there is more risk. Because of the continuous increase in oil, which we started with our own hands, led to the replacement of oil with another energy, Andrey Khokhrin.
Natalia Malykh agrees: historically, the oil and gas industry is a poor safe haven to wait for a major recession – even taking into account the actions of OPEC +, the oil and gas downturn can be brutal and milestone, as in 2020 or 2008. In the Russian oil and gas sector, the preferred shares of Surgutneftegaz, the price of which is usually determined by the amount of the dividend based on the exchange rate of the ruble, may be an exception. Note that the effects of a slight technical recession may be offset by OPEC+ actions.