EU and US futures continue the rebound from the lows of October. Several media reports of the withdrawal of Russian troops from Kherson.
The councilor of the regional administration in exile, Sergii Khlan, spoke a little while ago with the television Espreso TV about what is happening:
"Today the Russians have actually started to bring down the entire front line in the direction of Kherson and have started a mass retreat. Russian soldiers leave en masse, but when they do, they blow up the bridges"
Bloomberg that the withdrawal order would come directly from Defense Minister Sergei Shoigu. Kherson had been occupied at the beginning of the conflict.
The counting of the Midterm ballots continues; a narrow victory for the Republicans in the House is looming, but only by a few seats, enough to leave room for majority changes, even in the case of votes by small groups of representatives in disagreement with the party directives.
At 2.30 pm, 8.30 am for the US; there will be the decisive figure on inflation, the annual CPI. Antonio will give his prediction in his group on the given.
Conclusion
Despite the negative news, I expect a rebound in the indices, with the recession already priced into current prices. The possible end of the Ukraine conflict will be a strong driver that will push the stock markets even more.
For a rebound, I like the FTSE 100, where there is a clear boost from the Bank of England, which has announced further measures to ensure financial stability in the UK, strengthening its intervention in the long-term bond market.
As mentioned in previous articles, I expect a much stronger Europe than the United States, simply because the energy crisis is now managed, with the price of TTF Gas in free fall, and with the possible end of the conflict, which will be pure oxygen for the economies most affected, such as Italy and Germany.
I already have some excellent European stocks in my portfolio, and also a Chinese stock. The Chinese market offers incredible opportunities at these prices.
Natural gas: US gas proved strong after the October crashes. The factors triggering the rebound are the colder weather than expected and the reopening of major export facilities. In the long run, the situation is interesting.
Europe will need even more LNG to replace Russian volumes next summer when the continent recharges storage. At the same time, Chinese demand will recover from the blockages and offset lower imports from other Asian buyers.
In the short term, however, I expect new lows due to seasonality. The cold weather will go away very soon, and the reopening of the plants is already discounted in the prices. Any mini-rises due to weather conditions or the reopening of export plants will be immediately reabsorbed.
I opened an excellent bearish position on visible gas in my group yesterday, already in profit.
Telecom Italia (BIT:TLIT): As written in previous articles, with the right-wing government, the title would certainly have benefited from the plan to launch a takeover bid through cash deposits and loans. It is useless to focus on Telecom's value now, which is 0.16.
The takeover bid will take place at a much higher price. According to my models that include the commercial premium, the takeover price should be 0.45.
However, this will lead to delisting; it will be appropriate to liquidate the stock at the right time to avoid a long time of collection of the equivalent value in the event of delisting.
Oil: Despite the impending recession and Chinese policy, one of the largest consumers of oil, with zero tolerance for COVID, oil is confirmed as strong thanks also to the recent cut in production by OPEC.
The hypothesis of an armed conflict between Saudi Arabia, the second largest oil producer in the world, and Iran is increasingly concrete. I expect prices of $100 by the end of the year or immediately if the conflict breaks out.
In the short term, prices are suffering due to the data on negative stocks and due to the infections in China. My positive long-term outlook remains confirmed.