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Oil Corrects Amid Negotiations With Iran; Gold Could Sell-Off

Published 02/21/2022, 05:44 AM

EU and US futures rebounded after the recent declines, although the gains struggled to hold. NASDAQ -0.22%, S&P 500 + 0.02%, DAX -0.25%, FTSE MIB -0.70%, at writing.

The winds of war between Russia and Ukraine are still blowing. The situation in Donbas, the pro-Russian separatist region in eastern Ukraine, is increasingly tense.

According to Putin, in Ukraine, there is a massive violation of human rights against Russian-speaking citizens, and at the legislative level, discrimination against Russian speakers is consolidating.

The armies maneuvering in Eastern Europe make the desire to travel disappear and penalize the Travel sector: the Stoxx Travel & Leisure index is the worst among the sectors in the past week, with a drop of 4.8%.

The Elysée communiqué on the upcoming meeting between Vladimir Putin and Joe Biden contributes to today's rebound. But the rebound could end for a moment with negative news from Russia-Ukraine.

Hot Stocks and Instruments

The German DAX was awaiting an important release this morning, the Manufacturing Purchasing Managers Index. The number came out below expectations.

Gold is slightly down after the recent highs in the $1910 area.

On Friday, Crude oil closed in the red the first week after eight consecutive weeks on the upside. In recent days, prices have not been driven by the news on Ukraine but by those coming from the negotiations on Iran's nuclear activities. Even the Americans have admitted that something is moving.

Eni (NYSE:E): The figures for 2021 are excellent. Eni closed 2021 with an adjusted net profit of 4.7 billion euro, the highest since 2012.

Tim expressed 'disappointment and concern' over the press’ reconstructions of the new plan's goals on which the new CEO Pietro Labriola is working, marking them as 'unfounded and harmful for the company' and announcing complaints in the Public Prosecutor's Office and Consob. 'The plan,' Tim specifies, 'is being defined' and will be discussed in the Board of Directors.

Conclusions

Never before has the market been dominated by the flow of news from the Ukrainian borders. For the DAX I expect a close below 15,000, especially in the event of the diplomacy failing to promote a de-escalation. As I said in previous articles, I expect a peaceful conclusion, which will lead to a rebound in the markets.

The current tense situation favors gold, but the rate hike is imminent, and with the end of the tensions in Europe, we could see a sell-off of the safe-haven asset with the $1750 mark within reach. I have open sell positions in my portfolio.

With regards to oil, the possible entry into the supply market of Iran, which is one of the top 5 oil producers in the world, is not a positive. Although the confirmation of Iran’s re-entry would penalize oil in the short term, my long-term prospects remain intact. The $100 mark in the Summer is well within reach.

On Eni, the data for 2021 are excellent. In addition, there is an opening in Italy towards the search for new oil fields. The share is worth 15, a value that we will see shortly.

It is not the first time that chaos reigns in the Board of Directors in Telecom. When the stock was at 0.50 based on the news regarding the Kkr takeover bid, I was one of the few traders to say that the potential takeover would not materialize by assigning a price of 0.40 to Telecom. The company is poorly governed, weighing on the alarming growth prospects. New lows are possible in the 0.30 area.

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