The key indices of the US stock market - Dow Jones, NASDAQ, and S&P 500 - ended Friday with a new powerful fall. In principle, everything is going according to plan. The only confusing thing was the strong corrective turn that took place in the period from March 15 to March 29. It was he who made some experts assume that in fact, everything is not as bad as other experts predict and say in the media. However, from our point of view, everything is bad exactly as "other experts" say. It should be remembered that the key concern for the US stock market is not the geopolitical conflict in Ukraine (although it also has a negative impact), but the Fed's plans for the fastest and most powerful increase in the key rate over the past decade. Recall that in May the rate will be increased by 0.5%, and in June, most likely, by another 0.5%. In addition, the Fed's balance sheet reduction program, which is already called "QT" (quantitative tightening) or "anti-QE", will begin in June. But in any case, we are talking about reducing the money supply in the economy. If the cryptocurrency and stock market showed serious growth on the increase in the money supply, then it is reasonable to assume that with an increase in rates and a decrease in the money supply, they will show a fall. Therefore, our forecasts remain unchanged: the fall of the cryptocurrency market and the fall of the US stock market.
Meanwhile, the European Union is preparing a new, sixth package of sanctions against Russia. This was stated by the President of the European Commission Ursula von der Leyen. The new package of sanctions will target the main bank of the Russian Federation - Sberbank and oil imports from the Russian Federation. Recall that the European Union can solve the gas issue at least by the end of this year: reduce supplies from Russia by 2/3 and replace the missing volumes with supplies from Norway, the UK, and the USA. But oil is much more difficult, so there is still no question of an embargo now. It should be noted that Moscow is already beginning to experience problems with its oil since oil-producing platforms are not car factories: there are no spare parts, there is nowhere to sell goods, we will stop for a few weeks. Oil production goes on continuously and if there is nowhere to sell it, then you need to fill your underground storage with it. However, as practice shows, underground storage facilities fill up very quickly, and there is simply nowhere to put oil. The Kremlin has already offered India and China to buy oil at a discount of $ 35-40 per barrel. It is worth noting that even with such a discount, everyone remains satisfied since oil now costs more than $ 100 per barrel. Nevertheless, experts believe that it is unlikely that India and China will be able to buy all the oil from Russia, which the EU will refuse. It should be understood that logistics chains for oil imports are also established in these countries. It is unlikely that they will suddenly, out of the blue, want to buy a third more oil than before. Where to put it? Increase production by a third and distribute gasoline for free? In general, the situation with the redistribution of the oil market is one of the most interesting at this time.
