The RTS index futures spent most of the week in the bull zone. The last three trading days were marked by the growth of the stock spurt. In his address to the Federal Assembly, Russian President Vladimir Putin focused on supporting small and medium-sized businesses and infrastructure projects, and investors liked it. If the central topic of the message were not internal social and economic issues, but the topic of confrontation with the West, then at the end of the week we would not see market growth.
An important aspect is that our market is growing in sync with the growth of the MSCI Emerging Markets (EEM) index. The index rose 1.45% on Friday. Economic activity in the United States is showing an upturn, the domestic economy is also recovering faster than the Central Bank predicted. In general, the global economy will recover. And against this background, some of the investors who did not have time to buy American shares before the last wave of growth, which began on March 25, are buying cheaper, from a fundamental point of view, shares of developing countries. Moreover, good data on the Chinese economy came out last week.
It’s not scary to buy – there was good news from the front of the fight against coronavirus. Johnson & Johnson coronavirus vaccinations have resumed in the United States. The experts concluded that its benefits outweigh the risks. If you look at our market more globally, the last three days of growth did not knock it out of the sideways dynamics observed since the beginning of January. There are problems for the bulls. On March 15, they tried to break up the local maximum of February 151,200 for the RTS index futures, but failed. It turned out to be a “trap for bulls”, therefore, as the futures approaches this level, the selling pressure will increase.
Gold under pressure
With the price of gold, things are also going to be interesting. They remain within the local absorption trend formed on 03/31/21, but in the last two days of the last week they were decreasing. Britain, Israel and a number of other countries have made great strides on the mass vaccination front, and this fact is weighing down prices. On the 10-year US bond yield chart, there is an important support level at 1.528. Last week, the decline in yields stopped, and we saw a slight increase in yields from this level. This is not very good for gold. Prices can now get stuck in the $ 1750-1800 consolidation zone. I would not bet on a large-scale drop in gold prices – I would simply refrain from buying near 1800. When the bulls manage to gain a foothold above this level, prices will rise to the 1870 area, where the downtrend is taking place.
The US dollar fell to a two-month low, which is favorable for commodities, Asian stock exchanges are rising. For our market, everything is hiding well, except for the technical factor. The RTS index and its futures are moving within the local upward channel, the upper limit of which for futures is around 150-100. At present, there is little room for growth in the market. There is a possibility that after reaching this level, the stock quotes will begin to decline. The Russian stock market will look for new catalysts for growth in order for the RTS index to rise from the four-month sideways range. Let’s see in which direction oil quotes will begin to move after the OPEC + monitoring committee, which will be held on April 27-28.