Month: January 2022

Apple and Tesla report record revenue

Apple Inc. has published a report for the first quarter of fiscal year 2022. The company’s revenue reached a record $123.9 billion, an increase of 11% compared to the same period last year. Net profit amounted to $34.6 billion (+20%). Apple traditionally attribured the largest part of it to the iPhone, increasing sales revenue by 9% to $71.6 billion.

According to preliminary estimates, in the last quarter Apple became the leader of sales worldwide. Tim Cook, CEO of the corporation, said that such high results “became possible thanks to the most innovative line of products and services in our entire history,” however, some experts associate the unprecedented revenue of the company with increased demand for goods during the New Year holidays.

Tesla Inc., the manufacturer of electric vehicles, despite the problems in the supply chains, received a record net profit of $5.52 billion by the end of 2021, which is 7.7 times higher than in the previous year. The company’s revenue amounted to $53.8 billion (+71%), and the number of cars sold amounted to 936 thousand cars (+87%).

The main task of the company for the next year will be to increase production. According to Elon Musk, it is planned to increase supplies by more than 50%. It also became known that you should not expect new car models in 2022.

Stepan Sumin, asset manager of CRESCO Capital, analyzed the statements of both companies. Learn more from the video!

Forecast on the activity of the American regulator

Today, January 26, the US Federal Reserve will present the results of its two-day meeting. According to most analysts, the regulator will leave the key rate at the current level of 0-0.25%, but its other intentions are unclear.

Earlier, the head of the Fed, Jerome Powell, said that the main task of the US Federal Reserve at the moment is to fight inflation and curtail quantitative easing and asset buyback programs. A series of rate hikes will follow.

Against the backdrop of waiting for the decisions of the Fed, the volatility of the stock markets is growing, investors have taken a wait-and-see attitude. Yesterday, the NASDAQ fell 2.28%, the Dow Jones fell 0.2%, and the S&P 500, which has lost 11% since the beginning of the year, fell 1.2%.

Meanwhile, the dollar index against world currencies rose to a maximum since January 2022, to 96.26 points (+0.4%). The ruble fell slightly against the dual-currency basket.

Although the Russian currency is now more pressured by geopolitics and inflation, the tightening of the policy of the US Federal Reserve may also become a negative factor of influence.

“We expect the US Fed to be softer in rhetoric than the market has been suggesting so far. It is almost certain that the regulator will not raise the rate today, although many have already said that a series of hikes could begin before the quantitative easing program is finally curtailed.

However, we believe that this will not happen: a difficult situation has developed on the market, US indices of small companies have already fallen by 20-30%, and the main US indices – S&P 500, Dow Jones, NASDAQ – by 15%. This is a fairly serious fall, and the Fed will be forced to be more cautious. Nevertheless, inevitably 3-4 rate hikes will occur during the year, as well as curtailing programs. Therefore, the result of today’s meeting is most likely to be neutral and rather supportive of the market, and the Fed will look more gently and delve into this story without acting too aggressively.

For the world economy, raising rates is in any case a complication of processes and a rise in the cost of money. The World Bank has already lowered expectations for economic growth this year for almost all countries, including Russia, the USA, China and the European Union for 2022, while raising expectations for the next one by 0.1-0.2%. More expensive money will slow down the global economy and its development, as well as strengthen the dollar. Accordingly, this is a negative signal for the ruble, but all these factors are already embedded in our currency, and geopolitics directly carries greater risks than economics. We expect that the current pressure on the Russian currency will decrease and we expect it to slightly strengthen in the medium term to the nearest levels of 76 rubles per dollar,” Andrey Syrchin, CEO of CRESCO Capital Ltd., commented on the situation.

Analytics from Stepan Sumin, Asset Manager at CRESCO Capital

The Russian stock market is correcting up on Tuesday after a strong sell-off caused by increased geopolitical rhetoric. The Moscow Exchange index during the morning session adds about 2%, to the area of 3300 points.

Yesterday, the Russian market witnessed another “black swan” – it collapsed, unable to withstand the pressure of geopolitics. The Moscow Exchange Index fell by 5.93% to 3235.28 points, the RTSI – by 8.11% to 1288.17 points. Among the fall leaders were VK (-11.0%), Ozon (-10.6%), Aeroflot (-9.2%), Yandex (-8.7%).

The focus was on the situation around Ukraine. The triggers for such rapid sales were the news about the plans of Western countries to evacuate some of their diplomats from Ukraine in view of the expectation of a possible, in the opinion of foreign politicians, Russian invasion of the country. In addition, the media reported that the United States is considering the transfer of troops to Eastern Europe.

This morning, stock prices are rising, but as we can see, there are no bullish divergences on the main indicators on the daily stock charts. The Moscow Exchange Index is in the bearish zone, and in order for the situation to change, it is necessary to break through the 3650-3680 mark, the nearest technical resistance is at the level of 3550.

The RTSI index feels a little more cheerful in the morning, adding 3.1% at the moment, but at the same time, strong volatility throws the index in different directions, and we see a range of 129160-134320 for the March futures on the RTSI index. By 12 am, having closed the trading gap on Monday, it is trading near its open price of 131500.

On the Western grounds there is negative sentiment on the eve of the meeting of the US Federal Reserve, although yesterday’s technical rebound in US indices showed that there are cartridges. The puncture of the 200 EMA only strengthened the feeling of an early decline in the US market.

A possible scenario in terms of technical analysis: SPX will move sideways 4240-4400, but with the slightest positive news, it can make a technical rebound to the area of 4480-4529, after which there will be a rollback back to local support zones.

We expect continued strong volatility in the markets and active speculative transactions during the day. The next two days in connection with the Fed meeting may set the tone for the markets for several weeks ahead.

RTSI and IMOEX indices fell to their lowest since December 2020

The growth of geopolitical risks around Ukraine again caused the collapse of the Russian market. On Monday morning, Russian stocks showed a sharp decline.

For the first time since December 2020, the IMOEX index fell below 3200 points, to 3182.37 points (-7.46%), while the RTSI index lost almost 10%, falling below 1300 points, to 1270.97 points (-9.34%).

The leaders of the decline are stocks of OZON (-13.1%), Yandex (-11.6%), VTB (-9.4%), AFK Sistema (-9.2%), Gazprom (-8.6 %), ALROSA (-8.5%), TCS Group (-8.3%), UC Rusal (-8%), Sberbank (-7%) and NOVATEK (-6.9%).

The dollar exchange rate for the first time in a long time exceeded the mark of 78 rubles, rising to 79 rubles. The euro exchange rate at its peak was ₽89.33 (+1.35%).

“The situation on the Russian market is developing very rapidly, changing both up and down. Having opened quite positively in the morning, later we saw a gap of -10% on the market collapse. You need to understand that professional investors in this case are buying up the market, and physicists are being cut off their credits. There was a fairly large number of investors on the stock exchange, standing with a large leverage up on many shares, but at the moment they have been carried out of the market quite strongly.

A repeat of this situation is possible, but in general, when the market declines like this, it means a very good time and a sure sign to buy depreciated securities. We remind you that the dividends from the shares did not go away, just as the value from the shares did not go away. The cash flow to the country, and hence to oil and gas companies, as well as banks, is very high, so the marginality of the business will increase. Turnovers on the stock exchange are high, which means that the MICEX will also benefit from this whole situation.

Based on this, we recommend investors not to panic and monitor the situation. Already now there is an opportunity to buy some Russian securities much cheaper, with a discount of up to 50% or more compared to the prices of November-December last year, which were relevant for just a month. Therefore, the current situation should be assessed more as an opportunity than as something terrible,” commented Andrey Syrchin, CEO of CRESCO Capital Ltd.