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Ukrainian-Russian war, day 13. What is happening in the world?

Relevance up to 23:00 2022-03-08 UTC–5

The key indices of the US stock market – Dow Jones, NASDAQ, and S&P 500 – closed Monday with another fall. As of March 8, the quotes of all three indices are near their local lows, the correction continues and, most likely, the fall will continue on the US stock market. In principle, we talked about the fact that the US stock market will be adjusted in 2022 even before the start of the Ukrainian-Russian war. This was expected because the Fed is going to raise the key rate not even several times, but many times over the next 2 to 3 years. That is, to seriously tighten monetary policy. Well, the conflict that has arisen in Eastern Europe is another strongest downside factor for all risky assets. As already mentioned, it is from risky assets (which include stocks) that investors get rid of in the first place.

What is happening in the world now? The first thing to mention is the failed third round of negotiations between Moscow and Kyiv. Of course, the parties reiterated that “there is little progress,” but everyone understands that “little progress” means “long negotiations.” This means that the war will not end in the coming weeks. French President Emmanuel Macron has openly stated that he does not expect a de-escalation of the conflict in the near future. Meanwhile, Rosneft failed to make a payment on its bonds yesterday, and Gazprom probably won’t be able to make a payment today. Recall that Russia has banned currency transfers abroad, so Russian companies are physically unable to make such payments, even if they have much money. At the same time, Russia’s credit ratings have already declined from “junk” to “pre-default”, and the investment bank Morgan Stanley said that Russia could default as early as April 15. In general, there is no positive news and it is unlikely that they will appear in the near future.

The Russian ruble, meanwhile, has updated its anti-record against the dollar. And against all other world currencies, too. Now a dollar costs 150 rubles. And, according to most experts, it will continue to fall, since the Central Bank of the Russian Federation simply cannot hold the course. The Moscow Stock Exchange will open tomorrow after a long downtime and experts expect its total collapse, and with it a new collapse of the Russian ruble. Oil and gas are flying into the skies, especially against the background of news that some European countries are ready to completely abandon energy carriers from the Russian Federation. The United States also announced its readiness to completely abandon the import of oil and gas from Russia. Experts expect that oil on the market may rise to $ 300 per barrel if an oil embargo is imposed against the Russian Federation. This, of course, is good for those who produce this oil (Russia), but will there be anyone to sell it to?

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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