Tag: Russia

Natural Gas Opportunity For Savvy Investors

Posted on by Matt Thalman

On August 31st, Russia's state-owned energy company, Gazprom, stopped the flow of natural gas in the Nord Stream 1 pipeline. The pipeline ran from Russia to Germany and was scheduled to be discontinued from August 31st until September 3rd. But September 3rd came and went, and the pipeline remained shut down.

At first, an oil leak was reported, causing the pipeline to remain shut down. But then, it was evident that the shutdown was in retaliation to the sanctions the West had implemented against Russia due to the war in Ukraine.

Many experts predict the economic pain in Europe will increase as the cold weather sets in across the continent. Some have gone as far as to say that the economic pain will be felt in both the coming winter and next winter, 2023-2024. Some are even saying that energy rationing will be required to ensure everyone has enough natural gas for heating.

However, many in Europe have been planning for this to occur for some time. Russia had reduced the pipeline operating volume to just 20% of what it could provide.

This was far less than what Europe comfortably needed to make it through winter. Thus, the European Union and other entities have been working on replacing the lost volume through other means. So while the pipeline shutdown is not ideal, it was predicted to happen at some point this winter.

Many are saying Russia is attempting to weaponize its gas supply to hurt the EU and other nations in an attempt to have Western countries drop or reduce sanctions against Russia.

At this time, there is no sign that either the EU or Russia will bend to the will of the other, and it is likely that we will continue to see elevated oil and gas prices in Europe. Thus, comes the opportunity for savvy investors.

I want to note that I am not condoning an attempt to profit from someone else's pain and suffering. I want to point out the high likelihood that natural gas prices will likely increase this winter as the EU finds ways to replace the gas they acquired through the Nord Stream 1 pipeline.

With that all said, let's look at a few of the options you have if you want to invest with the idea that gas prices will rise this winter. Continue reading "Natural Gas Opportunity For Savvy Investors" →

Situation With Russian ETFs Highlights A Bid Risk

Posted on by Matt Thalman

As the world watches Russian troops attack Ukraine, global leaders impose sanctions on Russia, as opposed to sending military personnel to assist the Ukrainian people with repelling Russian forces. Over the long term, these sanctions may impose more damage on Russia and the companies that lay within its borders than troops perhaps could. It is unknown, though, at this time, what the total economic toll of these sanctions will be on Russia and its economy; however, most analysts feel it will be substantial.

But what may be more destructive long-term for Russia is not what is happening to the country today but what may not happen to Russia in the future, new development and investing. The Russian stock market shut down shortly after Russian troops entered Ukraine. But not only did Russian stocks stop trading in Russia, but also in the US and other markets worldwide. Furthermore, countless foreign businesses that had operations in Russia have pulled out and no longer operate their stores, shops, and factories in the country.

So, both the individual business investments have walked away from Russia, and the world financial markets have essentially cut Russia off from capital. This lack of capital both from the smaller individual standpoint and the larger global point of view, could put Russia in a tight spot in years to come as the country and its businesses may struggle to grow and re-invest in themselves without the support of foreign investment. Continue reading "Situation With Russian ETFs Highlights A Bid Risk" →

Geopolitics - Sell The Rumor, Buy The News?

Posted on by Noah Kiedrowski

Relentless Selling

The old adage is buying the rumor and selling on the news; however, during this recent market correction, it's been the opposite. Selling the rumor and buying the news has prevailed when it comes to interest rate hikes and the geopolitical tensions between Russia and Ukraine. In both cases, the anticipation of rate hikes has sent the market into a downward tailspin despite the fact the Federal Reserve hasn't put forth any rate hikes. In addition, the anticipation of the Russian/Ukraine conflict boiling over into an invasion by Russia drove the markets further into correction territory.

As a result, the markets entered deep into correction territory. Over a third of the Nasdaq 100 stocks traded off at least 30% or more from their highs, over half of the S&P 500 fell 15% or more while the median biotech stock had sold off by 60% or more. In addition, massive amounts of market capitalization have been eviscerated across the board, with many individual stocks selling off 50% or more throughout this downward spiral.

Per Tom Lee, many factors, including the market's big reversal at the onset of Russia's invasion of Ukraine, indicate the markets are now bottoming around these levels. Lee stated that the market's stunning comeback in stocks and a reversal in the Cboe Volatility Index signal that the pain in the market could be coming to an end. The market had a "buy the invasion" moment, Lee said in a note. The S&P 500 opened down more than 2.6% on the invasion news, and oil prices surged above $100 per barrel. However, markets typically sell off into the buildup of geopolitical escalations but rally on the day of the invasion. Continue reading "Geopolitics - Sell The Rumor, Buy The News?" →

Unprecedented Oil Glut Appears Inevitable

Posted on by Robert Boslego

The U.S. has voiced its concerns over the Saudi-Russian oil price war, but thus far, those concerns appear to have fallen on deaf ears. In an interview that was broadcast on CNBC, Senator Ted Cruz (R-TX) answer the question, “Do you think President Trump should try to use his influence with Russia or Saudi Arabia to try to get them to stop producing so much oil?”

“Absolutely. I think that is a major priority especially for my home state of Texas. And if you look what happened, right in the midst of the coronavirus crisis, a public health crisis that is dominating our focus, and an economic crisis that is flowing from it. Millions of people losing their jobs.

“The Saudis and Russians decided to take advantage of that crisis by flooding the market and driving the price of oil way, way down. And that was opportunistic. It was designed with a very specific purpose. The Saudis are trying to drive out of business American producers, and in particular shale producers, largely in the Permian Basin in Texas, North Dakota and in a number of oil producing states across the country.

“That behavior I think is wrong. I think it is taking advantage of a country that is a friend.

“A couple of weeks ago, I joined with thirteen senators in a letter to the Saudi Ambassador to pull back and stop trying to drive the price down to artificially low. Nine of the thirteen did a conference call with Saudi Ambassador that was as candid a call and direct a call as I’ve ever had with a foreign leader. The nine of us unloaded on her. And their defense was but Russia is doing this.

“I said but Russia is not our friend. We treat them accordingly. We are aware of their Continue reading "Unprecedented Oil Glut Appears Inevitable" →

Metals Moving In Unison For A Massive Price Advance: Part 1

Posted on by Chris Vermeulen

Are the metals markets ending a price correction in unison and preparing for a massive price advance? This is the question we asked our research team to investigate and their findings may help skilled traders identify great opportunities in the future. This multi-part research article will share our most recent opinion about the metals markets as well as share some critical new data that can shed some light into what we believe will become a massive upside price rally in the metals markets. Let’s get into the data.

When one considers the global demand for Gold as a hedge against economic crisis events and the continued advancement in gold reserves for China and Russia, one has to consider the supply side issues that are a result of central banks global demand. Even though global production of Gold is near an all-time high, the demand from foreign nations and central banks are also near all-time highs. This correlation creates a demand-side consumption that offsets supply and, in some ways limits, consumer, retail and technology suppliers.

Our researchers focused on this aspect of the supply/demand equation when trying to analyze recent metals price action in correlation to disruptions that could occur in the markets. For example, increased central bank buying/hoarding of gold could dramatically result in prices spiking. Foreign market disruptions in supply could also send prices spiking. Global conflicts and or continued trade issues could send metals prices skyrocketing. Anything to do with the supply side for Gold could send prices higher. At least this is the conclusion of our research team at this time. Continue reading "Metals Moving In Unison For A Massive Price Advance: Part 1" →