Translated material
Markets return to 2008, a trillion for the poor and five years since Nemtsov's murder
Markets, oil and ruble continue to plummet due to coronavirus
The collapse of world markets due to the coronavirus is becoming catastrophic - today, American indices are falling again. Since last Thursday, they have lost almost 10% - this is the worst week in the US since the 2008 crisis. The Russian market again collapsed by more than 3%, and the dollar is worth more than 66 rubles. US banks fear that this week's events may be just the start of a big sell-off.
What's happening
- American indices are in the red again, the fall continues for the fifth day. S&P 500 by 20:00 Moscow time lost 1.2% (-8.9% by the close of last Thursday), Dow Jones Industrial Average - 1.14% (-8.8%), Nasdaq Composite - 1.25% (9 %). Compared to 2020 highs, US indices have already fallen by more than 10%
- The European Stoxx 600 closed down 3.7% and lost 9.5% for the week.
- The only market that paradoxically feels good is China: the CSI 300 stock index has won back all the initial fall on the news about the coronavirus, and the yuan has risen in price against the dollar to the maximum since August 2019.
- In Russia, everything is no less sad than in the United States: after yesterday's stabilization, today the Moscow Exchange index fell again by 3.37%, the RTS dollar index - by 5.13%. The ruble lost another 75 kopecks against the dollar and costs less than 66 rubles/$, while against the euro it fell by 1.44 rubles, to 72.7 rubles/€.
- Obviously, the Russian market is moving along with oil, which lost 2.6% today ($52 per barrel of Brent). Since the beginning of the week, oil has lost more than 10% - this is the worst week for it since 2016. Members of OPEC+ will meet next week in Vienna to discuss retaliatory measures, but there is no agreement between them, as it turned out last week.
What's up with the virus
- For the second day in a row, the number of people infected with coronavirus in other countries is growing faster than in China. On Tuesday afternoon, the number of infected people worldwide was 3,474 - more than 500 new patients per day. The worst news for the American markets was the appearance in the United States of the first patient whose source of infection is unknown.
- for the first time The head of the World Health Organization (WHO), Tedros Adhanom Ghebreyesus, at a daily briefing, said that the disease has the potential to turn into a pandemic - and now we are passing a decisive moment, after which it will become clear whether this happened or not. Italy remains the main focus of the spread of the virus in Europe, with 650 cases - here we have described in detail how the country lives in an epidemic and fights it.
What will happen next
- In addition to news about the spread of the virus, the market was driven down by the publication of new forecasts about the impact of the epidemic on the economy. Goldman Sachs released a report in which it predicted that due to the coronavirus, the average profit of US companies will not grow in 2020, cutting its forecast for this indicator by 6.3%. The new forecast reflects a sharp contraction in business activity in China, a drop in demand for products from US exporters, the disruption of supply chains and rising uncertainty, the bank said.
- Both Goldman Sachs and Citi believe that this week's events are only the beginning of a sell-off in the US stock market. According to bank strategists, the market decline with periodic rebounds may last until the summer. Citi believes that the S&P 500 may find a bottom when it reaches the level of the moving average for the last 200 days - that is, the level of 2730 points. Before it, the market remains to fall by another 12%. Both Goldman Sachs and Citi have so far discouraged clients from buying risky assets.
- Economists polled by The Wall Street Journal admit that the epidemic will slow down the growth of the American economy, but so far believe that it will not lead to a full-fledged recession. S&P Global assumes that in the first quarter, US economic growth will slow down by half - from 2.1% to 1%, and only half of this fall will be due to the coronavirus. But much will depend on how the virus behaves in the US: an epidemic in New York could shut down financial markets, in San Francisco it could shut down the high-tech industry, said Ann Bovino, chief US economist at S&P Global.
What do I get from this?
The main advice that absolutely all managers give to a non-professional investor in such situations is not to rush and not make sudden movements. It is obvious that neither the world market nor the Russian market has found the bottom yet, and the share of uncertainty remains the highest - it is still too early to buy shares that have fallen in price.
MONEY
What to buy after a crash
The fall and hellish volatility in the markets due to the coronavirus is not forever: the market will bottom out, and it will be time to buy. Russian stocks, which analysts called overvalued before the fall, this applies in particular. We asked major brokers (Tinkoff Investments, BCS, and Otkrytie Broker) what their clients were buying during last year’s record growth of the Moscow Exchange index to compile a list of the most popular stocks, and asked analysts to explain why they rose or fell in 2019 year and what awaits them in 2020.
A trillion for the poor
The idea that Andrei Kostin and Maxim Oreshkin liked so much - to exempt the poor from paying personal income tax - would cost the budget about 1 trillion rubles a year, the Federal Tax Service calculated. Compensating for them, even by raising taxes for the conditional rich, would be problematic - this would give no more than a few tens of billions. According to the Federal Tax Service, the official salary of 28.2% of citizens does not exceed 10 thousand rubles a month, or about 114 thousand rubles a year, 65% of the population earn from 114 thousand to 1 million rubles a year, and only 6.9% receive more than 1 million rubles a year. Resetting personal income tax to fight poverty in such situations will almost certainly not be done - recently, Finance Minister Anton Siluanov once again promised not to touch the key tax rates until 2024.
THE BELL PARTNERS
Big data in big business
Five years ago, even large companies did not fully understand what to do with big data. Today, big data is used in a variety of industries - from banking to the agricultural sector. Thanks to big data analytics, companies optimize sales and logistics, get to know customers better and, as a result, develop the most suitable offers for them. Watch in the video, listen in the podcast, and read how big data has changed the lives of businesses and what you can learn from companies already using big data.
A LOSS
Five years since the murder of Nemtsov
Today marks five years since the assassination of Boris Nemtsov: on February 27, 2015, one of the most famous and popular opposition politicians, a former deputy prime minister, was shot dead on the Moskvoretsky bridge, 300 meters from the Kremlin. No more news about the murder investigation. The alleged perpetrators were convicted back in 2017. The alleged organizer, Ruslan Mukhudinov, a fighter of the Chechen battalion "North", is wanted - although, according to the lawyer of the Nemtsov family, he moves around Russia on forged documents. Those who ordered the murder have not been officially identified. One of the most detailed journalistic investigations of the murder can be read here .
In Prague, in honor of Boris Nemtsov, the square in front of the Russian embassy was named today . The Kremlin said that there are no plans to perpetuate the memory of Nemtsov. But the senator from Chechnya Suleyman Geremeev, who was mentioned in the criminal case on the murder of Nemtsov, was today awarded the medal of the Order of Merit for the Fatherland. in Moscow and other cities on Saturday Marches in memory of Nemtsov will be held .
BELL CLUB
Closing of the first season of BellClub
On March 5, 2020, we will close the first season of this year's BellClub with a meeting with the hero of Russian Norms!, American entrepreneur and investor Semyon Dukach. Semyon became famous when, during his graduate studies at MIT, he beat Las Vegas casinos and earned $ 4 million. Now Semyon invests in projects of other entrepreneurs. The main feature of his venture fund One Ventures is that it invests only in immigrant founders. The volume of the fund is $28.5 million. The Xconomy publication included Dukach in the list of top business angels in New England. Tickets for the meeting can be purchased here .
And from March 29 to April 9, a ten-day educational course will be held in Silicon Valley, which was prepared by the team of The Bell and Russian Norms! with Stanford professors and the Haas Business School at Berkeley.
Here you can find out:
— what is design thinking and how to apply it to create innovative products;
— how to use artificial intelligence and big data in your business;
- how to bring the company to the global market;
— how to pump leadership qualities, emotional intelligence and communication skills.
We will introduce you to entrepreneurs, investors from Silicon Valley and the heroes of Russian Norms!
PRACTICE
How to calculate how long you live in retirement
A growing number of startups are selling tools that include genetic and other tests that estimate an approximate lifespan. The resulting figure should help a person calculate how much money to allocate to their retirement savings and whether to take out life insurance. The WSJ talks about such calculators and warns that they often give exaggerated results to motivate people to invest more in their future pension. One of the online calculators calculated for the correspondent of the publication that he would live to be 103 years old, although a professor at the University of Illinois, who gives individual forecasts, gave him no more than 88. Read more here .
How the Apple Watch will fight stroke
Apple has announced a new three-year study in collaboration with Johnson & Johnson to prove that the Apple Watch can prevent stroke. The Heartline project has been called the company's most ambitious medical research ever. About 150,000 people over 65 will take part in the study. Users will be required to follow the smartwatch's recommendations of getting up more often when sedentary and doing minimal physical activity through regular walks. Also, the application will show the heart rate and give a sign if a sharp arrhythmia of the heart is noticed, so that the person immediately consults a doctor. Also, the question is now being considered whether it is possible to include in the application the option to remind the appointment of medications by the hour. For participation in the project for several years, participants will receive about $150.