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Macro overview of the current week

Macro overview of the current week

30 September 2020

New support measures and upcoming US political debate

On Monday, the NASDAQ Composite added 1.87% and the S&P 500 rose 1.61%. However, the current values ​​of the index are still significantly less than those of the beginning of September. The key boost to the stock on Monday came from House Speaker Nancy Pelosi, who said the Democrats are pushing for a $ 2.4 trillion deal that will direct payments directly to American households and support businesses. This payout can actually stimulate households and increase firm profits.

Another round of stimuli in October may lead to continued growth in bank shares. The presidential candidates will take part in the first of three debates on Tuesday, and some data on consumer confidence and house prices will also be released.

The following news may serve as the main drivers of growth in quotes on Tuesday (09/29/2020):

Congress is trying again and again to hold another round of financial assistance to the economy. Now that stimulus appears to resume again, financial sector stocks can be expected to help boost.

The S&P financials sector rose 2.3% on Monday, helping to smooth out potentially dire results for the year. In three months, the financial sector gained 2.25%, although it is still down 23.5% year on year. Unlike tech companies, most of which are trading above March quotes, stock prices in financial sector companies have not yet returned to pre-crisis levels.

Additional stimulus could help large lenders such as Citigroup, which rose 3% on Monday. JPMorgan gained 2.9%, Bank of America rose 2.6% and Wells Fargo rose 0.8%.

The political context in the face of the upcoming elections also increases market volatility:

US President Donald Trump will meet his electoral opponent, former Vice President Joe Biden, in the first of three televised debates on Tuesday evening. The two are expected to answer questions about everything from health policy during COVID-19 to national security and immigration.

One of the expected questions for Trump will be about taxes. Since the NYT has published an article saying that the current US president, the year he was elected, paid only $ 750 in income tax.

Thus, the current week promises to be rich in unexpected news. Uncertainty in the financial markets still persists for many reasons. From COVID-19 to the upcoming US presidential elections.

Sberbank update

On Thursday last week, what many Russian investors had been waiting for happened. Sberbank presented a large-scale upgrade of its business: the bank’s ecosystem was officially named “Sberbank”, branches will remain without cash registers, but they will be able to recognize the client by face. Thus, what the analysts said happened – Sberbank is becoming a real technology company. In recent years, this trend has clearly been observed. However, the company’s core business is still banking.

The presentation began with the presentation of a new logo: it is a gradient blue-yellow-green unfinished circle with one green checkmark inside and the name “Sberbank” written next to it, executed in green.

One of the main changes is the renewal of the office format: it will not have bulletproof glasses and cash registers, but there will be checkpoints in which it will be possible to receive a parcel, and all issues can be resolved at a round table with a manager over a cup of coffee. At the same time, the client does not even need to take a passport with him – the biometrics system recognizes him by his face and will help to carry out operations. The first office of this type has already opened in Moscow.

Sberbank also presented a new ATM, the screen of which is similar to a smartphone: on it you can learn about new products and services, call a taxi, buy a ticket or even order food. At the same time, forgetful clients will not need a bank card – identification in the device will be possible to pass by the face, and use voice for commands.

Potential competition between Sberbank and Yandex

Sber also prepared several technological innovations for its presentation. Gref said that now the emotional family of virtual assistants “Salyut” will work in the bank. Assistants can carry out commands or assignments, turn on a movie, talk about various topics, and are actively interested in the client’s preferences and interests. Assistants will also help with financial issues, they promise in the group. Thus, Sber’s products will compete with Yandex.

The company introduced three assistants. Each user can choose the one he likes.

These assistants should also appear in the Sberbank Online mobile application after the update. They know how to send transfers and top up their mobile phone, but they continue to learn. These assistants live in smart devices “Sberbank”. One of them is the SberBox TV box with voice control, which allows you to watch TV channels, movies and videos, as well as delegate various tasks to a virtual assistant. Some films support the video shopping function: if you like the hero’s costume, you can ask the console to find the same or similar one in partner stores. Users will also be able to listen to music through SberSvuk and play popular mobile games on the big screen, the bank promises.

The second smart device that was unveiled on Thursday was the SberPortal smart display, which can be controlled using gestures or voice. The built-in virtual assistant is able to identify its users and, depending on this, offer the appropriate content. At the same time, the group promises that the device is absolutely safe: the microphones in it can be turned off, the camera can be closed with a special magnetic cover, and the video is played only on the device, without data transfer to the cloud.

Thus, the current transformation of Sberbank into a full-fledged ecosystem will make it possible to diversify the business and increase its attractiveness in the eyes of investors and ordinary users.

Cruise line stocks are gaining momentum.

As you know, cruise lines have been hit hardest by the current crisis. Some of them fell 70% in March and still haven’t even returned to 50% of their previous value.

However, the companies’ shares began to rise amid revaluation of analysts. Norwegian Cruise Line rose 13.6% on Friday, Royal Caribbean climbed 7.7% and Carnival climbed 9.7%. This happened after analysts at Barclays announced that the sector was approaching a “turning point”. Bank analysts have raised the rating of the companies.

On the eve of the end of the restrictions on sea cruises from the Center for Disease Control and Prevention (CDC), an analyst statement was announced. The restrictions will end on September 30, 2020, but experts in this area do not rule out that the ban may be extended until the IV quarter of 2020. The forecast is based on a possible positive comment from the CDC, which, according to experts, signal the resumption of sea cruises in the short term.

This will be followed by an increase in the share price. Like the airline industry, the cruise sector has been hit hard by the negative impact of the coronavirus pandemic. In July, cruise industry leaders Royal Caribbean and Norwegian Cruise Line announced a collaboration to develop improved cruise safety standards in line with global requirements.

At the same time, an expert group was formed: The Healthy Sail Group, which plans to jointly develop recommendations for cruise lines to improve public health measures in response to the pandemic and thus increase the safety of cruises, which in turn will help to renew demand for cruise services. companies. If the vaccine issue is resolved in the near future and the demand for cruise services gradually recovers, this will lead to a return of investors to the cruise sector.

Aravana Capital Management provides clients with profitability even during downturns in the global equity and bond markets.

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30 September 2020
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