Morning Note /

Alfa Morning Bulletin: 20 January 2021

  • Russian stock rally stalls

  • Markets lack direction as investors weigh large stimulus plans

  • Favorable market backdrop for Russian stocks today

20 January 2021
Published byAlfa

Russian stock rally stalls: Gains were hard fought on global markets Tuesday and most European gauges lost steam by the bell on a mixed mood ahead of Joe Biden’s inauguration today. Russian stocks faltered in the latter part of the session – RTSI (-0.3% @ 1,470) and IMOEX (-0.8% @ 3,443) – with mixed trends sector wise. The ruble strengthened (+0.5% @ 73.67) against a weakening US dollar (DXY -0.3% @ 90.49) as doubts emerge as to how much of President-elect Biden’s $1.9 trillion fiscal stimulus package will pass Republican opposition in Congress. Crude oil quotes rebounded robustly (Brent +2.0% @ 55.86).

Favorable market backdrop for Russian stocks today: Russian stocks and the ruble are likely to have support today from a weakening US dollar, higher oil prices and improved appetite for risk and EM assets as investors weigh up incoming US Treasury Secretary Janet Yellen’s call for largescale fiscal spending while lending rates are cheap. Over recent sessions investors have lost appetite for cyclical stocks with a preference emerging for small caps and value names. Attention today will be on Joe Biden’s inauguration at noon in Washington, where a smooth transition is expected. Investors will be eager to see what the priorities of the new Administration will be, but those priorities should provide direction for markets. We expect the markets, including Russia, to remain in a holding pattern today.


Russian government spent RUB2.1 tn on national projects in 2020 – MIXED

Russia’s current account surplus came at 2.0% of GDP in 2020 – MIXED