May 22, 2022

Hardwood Paroxysm

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Nuclear spectrum in the markets, hit Europe with a value of 400 billion – the world

The specter of a nuclear disaster alarmed the markets after the Russians attacked the Zaporizhzhya (Ukraine) plant. A point of no real return in the 9-day war that has mainly affected European stock markets, leaving Wall Street relatively safe, with declines close to 1 percentage point. On the Old Continent the jingle was so powerful, nearly 400 billion in capitalization (393.71 to be exact) were burned in one day. In his small square, Piazza Avary 36.14, has sent up to 83.96 billion since last February 24, the day of the first Russian attack on Ukraine. An exciting scenario, with Milan down 6.24%, Paris 4.97%, London 3.59%, Frankfurt 4.39% and Madrid 3.68% at the end, but still far from the Brexit levels of June 24, 2016 when the dip was double.

Prices for raw materials rose starting with gas, reaching new records at 204.15 euros per megawatt-hour, an increase of 26.94%, until they reached 29.5% at 208 euros, despite Gazprom’s reassurances that it announced regular shipments of methane. To Europe via Ukraine, with flows up to 109.5 million cubic meters. But crude oil also rose, with a barrel exceeding the $110 threshold for WTI (+3.17% to $11.14), Brent (+2.96% to $113.71) and aluminum (+4.13% to $3716.5 per ton), of which Russia is major source. But tension has escalated, as it has been for days, on the agricultural front as well. Wheat hit a record €400 per ton on the Paris Stock Exchange, making 38% in one week, while in Chicago it rose 6.52% at $1,225.25 per 5,000 bushels, while corn prices soared to $773 per 5 bushel mile. . Strong tension is also on the monetary front, as the euro fell below the $1.1 threshold, leaving 1.3% in the field at $1,092. The British pound also fell (-0.89% to $1,322, while the ruble’s collapse continued (-11.86% to $124.23), the only spy measuring the state of the war economy. Russia. In fact, the Moscow Stock Exchange has been closed since last February 25 and the London-listed securities are off after reaching values ​​\u200b\u200bclose to zero. On the other hand, the probability of bankruptcy on Moscow government bonds is increasing.

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In fact, credit default swaps (CDS) on Russian five-year debt rose to $1,584, a value that implies a 67% probability of default. Also ignited by the risk of collapse in the private sector: Sberbank, one of the major banks hit by the sanctions, this morning saw credit swap contracts, which are guaranteed against bankruptcy, rise to nearly $2,400 from about $750 at the start of the month. As for stocks, sales were focused on the financial sector, with Unicredit (-14.6%), Bieber (-10.58%) and Intesa (-9.01%) freezing lower even in Piazza Avari, where it hasn’t been seen for some time. For Piazza Gae Aulenti in particular, exposure was weighted in Russia, also shared by Commerzbank (-10.27%) and SocGen (-10.03%). The automotive sector is under pressure with Stellantis (-7.61%) and luxury brands from Volvo (-7.63%) to BMW (-5.69%) and Mercedes (-3.67%), while Renault (- 4.42%). The owner of the first domestic producer Avtovaz, he experienced a strong exposure in the country. Russia’s farewell finally flooded the oil sector, contrary to the trend in crude oil. In the bloodless Piazza Avary Eni sold 7.3%. In Paris it was TotalEnergies (-3.63%), while in London Shell it suffered above all (-4.65%).