Strategy Note /

Alfa Weekly Radar: Investors bet on delayed tapering and further stimulus

  • Russia led the EM stock rally last week, but the overall sentiment is fragile

  • MSCI November SAIR preview

  • Rusal and aluminum in focus and iron ore prices remain subdued

John Walsh
John Walsh

Equity Strategist

Denis Dorofeev
Boris Krasnozhenov
7 September 2021
Published byAlfa

Stock sentiment remains bullish: Stock markets are marching toward new highs as investors bet that weak macro data should delay tapering. There is also hope that Japan’s new prime minister may bring added fiscal stimulus to kick start the economy there, while there is speculation that China would also inject stimulus through fiscal and monetary policy to head off a slowdown in economic growth. Commodity prices are mixed as we start the new week. Aluminum prices have hit a 10-year high due to political unrest in Guinea. Talk of tapering being potentially delayed has pushed gold prices to 7-week highs. Coal prices are trading near record highs as are gas spot prices. However, iron ore prices and oil quotes remain under pressure with near-term risk to the downside. Russian equities can be expected to advance further this week driven by the reflation trade and cyclical stocks, with ample value remaining in value shares such as banks. Metals & miners should continue to attract buyers. Quality growth stocks, particularly mega-caps, are expected to remain in demand and that should provide a tailwind to Russian tech names.