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Ukraine War... How much will S&P drop this week?

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  • Originally posted by Zaphod View Post

    No, but it is gas on the fire.

    Oil was already structurally tight before putin. Injected more uncertainty sure, and we are now down towards levels of where we were overnight on the invasion.

    Honestly I think the easiest/simplest (though not necessarily all encompassingly correct) frame works is the covid fiscal/monetary boost was a one time event that is now waning slowly, getting taken off by inflation and fiscal chill, lets say we get back on trend if no recession, where is that trend?

    Its still quite a bit lower.
    From what I've seen is that despite the proposed oil bans, etc., Russian oil will almost surely find its way to the market one way or another. I think it's certainly multifactorial but I think it's laughable it's being blamed on Putin. The wheels for inflation have been set in motion well before Russia/Ukraine and now we're seeing those results yet it's trying to be pinned on the current events and not previous events.

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    • Originally posted by Zaphod View Post

      idk, china is strange i basically write them off. i dont trust their numbers nor anything they say intent wise. whole world is now in fomo for resources. Im super long all commodities so i am not objective.

      Euro is crushed by inflation/energy costs and the war. that will catch up to us at some point if not fixed.
      Basically, my entire stock portfolio has been 2X levered commodity tilted indexes since April 2020, so am thinking of when to start reducing leverage. I tend to think the Chinese will probably follow through on some major stimulus. The follow through from that may present an opportunity to delever for me.

      Europeans may be able to afford much more fiscal stimulus. They have been austere for a while. With a serious threat to the German economy, they may well loosen the purse strings.

      How are you structuring your commodity exposures ?

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      • Originally posted by CordMcNally View Post

        From what I've seen is that despite the proposed oil bans, etc., Russian oil will almost surely find its way to the market one way or another. I think it's certainly multifactorial but I think it's laughable it's being blamed on Putin. The wheels for inflation have been set in motion well before Russia/Ukraine and now we're seeing those results yet it's trying to be pinned on the current events and not previous events.
        Russian oil is interesting. They can’t shut it off readily at the wellhead without impairing reserves and they have limited storage capacity. They probably have lost a lot of brownfield projects due to multinationals pulling out.

        This feeds into lower Russian oil later.

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        • Originally posted by Dont_know_mind View Post

          Russian oil is interesting. They can’t shut it off readily at the wellhead without impairing reserves and they have limited storage capacity. They probably have lost a lot of brownfield projects due to multinationals pulling out.

          This feeds into lower Russian oil later.
          I don’t think they’ll have any issues finding buyers between China and India.

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          • Originally posted by Zaphod View Post

            No, but it is gas on the fire.

            Oil was already structurally tight before putin. Injected more uncertainty sure, and we are now down towards levels of where we were overnight on the invasion.

            Honestly I think the easiest/simplest (though not necessarily all encompassingly correct) frame works is the covid fiscal/monetary boost was a one time event that is now waning slowly, getting taken off by inflation and fiscal chill, lets say we get back on trend if no recession, where is that trend?

            Its still quite a bit lower.
            The US should get some benefit from military equipment sales to Europe. But probably won’t be enough without further increase in US defence spending to lift the economy.

            The situation now reminds me of 2012 in resources. China did a massive fiscal stimulus in 2010-2011. This resulted in people saying that resources were depleting and it was a once in a lifetime resources boom that would go on and on ( it didn’t).

            In 2020, we had the fiscal stimulus for COVD that was like the Chinese boost for resources in 2010. The narrative was that we had entered a new new era of incredible profits for tech companies that would continue for a long time.

            There’s always been a rotation between resources and tech and US and international.

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            • Originally posted by Dont_know_mind View Post

              Basically, my entire stock portfolio has been 2X levered commodity tilted indexes since April 2020, so am thinking of when to start reducing leverage. I tend to think the Chinese will probably follow through on some major stimulus. The follow through from that may present an opportunity to delever for me.

              Europeans may be able to afford much more fiscal stimulus. They have been austere for a while. With a serious threat to the German economy, they may well loosen the purse strings.

              How are you structuring your commodity exposures ?
              I have some broad commodity exposure but small overall. I do have a lot of energy/oil exposure XLE/XOP/PXE/PXI, and some of that was 2x up until new year, which I foolishly (in hindsight) delevered.

              Energy was getting hammered a bit end of day with rest of market and maybe "recession" fears, but hopefully if we have a small retracement I will once again sell covered calls on my holdings (leaps) I sold some a few weeks ago at recent highs and covered them monday. Hope to do a few times.

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              • Originally posted by Max Power View Post
                Market doesn't like war... never has. This might be the most predictable dip since COVID started...

                I would say probably down 3-6% by week's end. The bottom will depend on the headlines.

                And yeah, I did put my money where my prediction is... sold basically everything that isn't locked out on a covered call (so roughly half of my stocks/indexes sold and over 60% of my overall portfolio to cash now).

                So if retirement is like 15 yrs away do members here recommend getting out of stocks ? And bonds too ?

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                • Originally posted by nastle View Post

                  So if retirement is like 15 yrs away do members here recommend getting out of stocks ? And bonds too ?
                  And into what?

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                  • Originally posted by nastle View Post

                    So if retirement is like 15 yrs away do members here recommend getting out of stocks ? And bonds too ?
                    I will not be a fat retiree, 3 mil +/- so its not that I don't need the money but I plan to be sit tight with 70% in stocks until 5 years into retirement or sooner if there is a bull run within 2-3 years of my actual retirement date.

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                    • It is incredible how one person (Putin) can adversely effect financial markets, cause recessions, cause displacement and death for so many people. Regarding gas and oil, I'm of the thought that it is global market. If we/Europe refuse to purchase Russian oil and gas, the price of both increase and they are able to sell them both for comparable prices to China/India/the rest of the world while we have to pay more for our purchases. If I were in charge, I would not sell anything technologic to Russia but continue purchasing whatever gas/oil they have. Maybe do the same for Venezuela/Iran as well. Sanctioning commodities in a global market does not make a lot of sense to me. Whatever oil/gas we do not purchase from Russia will ultimately be sold to another buyer for a similar price.

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                      • Originally posted by Max Power View Post
                        For sure.

                        Poland won't be the last place to get cut off for not subscribing to the 'pay in Rubles' directive last month. Germany, another vocal refusal to pay in Rubles, is probably sweating the same fate (ok, maybe teeth-chattering that fate?). Russian energy is not like crops that will spoil. Ruskies can play the long game and simply store it or slow production if they don't get their price. The rest of Europe/world can bail out the countries that end up with a dangerous energy deficit, but that is not done for free. The USA can't just print money to solve that one... they need to deliver real physical oil and gas by the boat and truckload from somewhere.

                        I agree it will be a solid wave of market buy opportunities for months to come. I'm honestly surprised the market didn't fall harder or quicker from the setup of the invasion of Ukraine until now. It just cracks me up that market new today blames "weak tech earnings" or "China" for the worst day of 2022 yet. Not a word of Russia. Let's get real: the world runs on oil and gas, and the war is the root cause for low productivity, higher costs, and overall concerns.

                        The biggest overall gainers in this one look like India and China to me (Brazil also?). They aren't bailing anyone out, they aren't sending supplies to either side in the war, and they aren't paying inflated Russia energy prices. They can just sit aside and quietly be productive. BIC might do good things in terms of advancements or GDP the years to come, but who knows if the market (esp USA markets) will reward that??
                        As net importers of energy I am sure they prefer 100% of their oil costing $60 over most of their oil at $100 with a portion coming at a discount from Russia.

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                        • Originally posted by HumbleInvestor View Post

                          As net importers of energy I am sure [China] prefer 100% of their oil costing $60 over most of their oil at $100 with a portion coming at a discount from Russia.
                          Yeah, I think they will do well. It is all relative. If I pay $50/hr for staff but my competition pays $65, I am still winning that game. China and India are not dumping money into the war or being sanctioned by anyone (unless you count the US markets not acknowledging profits/production of their companies). Regardless, they can just quietly produce with little effect from the war or commodity prices. COVID is their only real obstacle right now.

                          NATO are not only paying more for gas/oil (their own or Russian), but they are printing or producing for Ukraine and each other left and right. They are dumping resources that will produce nothing. Countries that trade heavily with USA will feel our inflation (non-NATO or otherwise uninvolved with war, ie Mid East); they are tied to our money that we pay them with. China will get some of that... but they can mitigate it if they choose.

                          I have had BFK and BICK on my watch list for a few months now... I will grab a few contracts this coming week in your honor.
                          Since I don't own BABA directly anymore, it'll be a good way to own a bit of it again, along with having it in VWO.
                          Last edited by Max Power; 04-30-2022, 10:59 PM.

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                          • Originally posted by CordMcNally View Post

                            And into what?
                            Right I don’t see any better options but people suggest Bitcoin gold cash REITs etc

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                            • Originally posted by nastle View Post
                              Right I don’t see any better options but people suggest Bitcoin gold cash REITs etc
                              Those all seem like much worse options.

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                              • Originally posted by StateOfMyHead View Post

                                I will not be a fat retiree, 3 mil +/- so its not that I don't need the money but I plan to be sit tight with 70% in stocks until 5 years into retirement or sooner if there is a bull run within 2-3 years of my actual retirement date.
                                Would you put the other 30% in treasuries? Mid to long term ?

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