This week in global markets: bad news for Putin's friends
During the week, the U.S. market reached a local high, rising to a height where the index had not been for more than a year, and then rolled back a bit.
As a result, the S&P 500 opened Friday morning at 4534 points. This is 24 points higher than a week earlier. In general, the index has approached the values of historical highs, which are just a stone's throw away. This is not very reminiscent of a market worried about a recession amid rising money costs in the economy. Growth was held back by some giants' disappointing earnings reports, such as Tesla, Netflix, and IBM, which dragged down shares of other major corporations. For different reasons, investors and speculators remain worried about China, where Beijing is frantically looking for a way to get its economy running again. But for some reason, quotes from the Great Xi do not help much.
On the other side of the world, inflation has finally started to decline in Britain. The fight against inflation is difficult for London primarily because of the problems with Brexit. By and large, Brexit has become a problem in itself, and the British created it out of nothing. But where the inflation situation is awful is in Hungary. Orban's friendship with Putin does not help him curb price increases, and inflation here remains close to 20%, which is already much higher than even Ukraine's wartime figures.
After a sharp drop in gas prices on European exchanges, Ukraine's Eurobond market declined slightly over the week. Investors took profit after several weeks of steady growth. The situation with the grain deal didn't help either, where Russia not only withdrew from the agreement but also began to methodically destroy the infrastructure of Ukrainian ports, along with the grain there, trying to show everyone that nothing will work without its will, and Erdogan will definitely not be able to bend Putin. Putin seems to have decided to demonstrate his strength somewhere after a series of humiliations, the latest of which was the inability to travel to South Africa, where he could not be guaranteed to avoid arrest and was asked to refrain from tourism so as not to sin. So, he decided to take his frustrations out on Ukrainian ports, which are unable to hit back. This caused a price rise, still limited, on the global wheat and corn markets, where prices have risen by about 5% since the beginning of the week.
Overall, losing the grain corridor will be unpleasant for Ukraine's economy, but it will not be as critical as a year ago. Thanks to the development of infrastructure on the Danube and the western border, more than 70% of this year's export crop will be able to be exported without seaports. Of course, this is exceptionally unpleasant for agricultural businesses, especially those whose facilities were damaged by the bombing of ports. Looking at Kernel, for example, its former market shareholders now seem glad that they were recently bent over backward and forced to sell their shares. But it will not have a significant impact on the macro picture. The main thing is that our friends from Poland don't do anything strange anymore. Against this background, the hryvnia demonstrates calmness. It is not moving in principle, even on the black market.
Sens Bank, formerly Alfa-Bank Ukraine, has finally been nationalized in Ukraine. When it seemed that the case had been put on the back burner again, the political will was found, and on Thursday evening, the National Bank announced that they were taking the bank off the market. And now, if Friedman could come to Ukraine, or if Kolomoisky could leave Ukraine without attracting the attention of the sanitation workers and the FBI, they could have a cookout somewhere, sharing their pain. The food would be served by Vasyl Horbal, who once bankrupted UkrGasBank, the first in a series of nationalized banks. In general, this event will have little impact on the banking system of Ukraine, which has gained another state-owned bank. However, this did not increase the state's share in the system by much. The bank's customers certainly have no reason to worry, given the experience of the nationalization of PrivatBank. Significantly, few people were worried, although the topic of nationalization of the bank of a Russian oligarch has been discussed for the past year. In the end, neither an English passport, nor his Lviv birthplace, nor even Alfa Jazz helped Friedman.
P. S. Many of life's failures are people who did not realize how close to success they were when they gave up.
Thomas Edison
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