Weekly Market Summary

💡 1. The Ukraine crisis poses a severe threat to global optimism about the recovery from the pandemic after Russia ordered troops to enter Ukraine’s separatist regions, triggering a round of sanctions and higher energy prices. Now the tensions are forecast to push oil and gas prices higher and further slow the economic recovery, especially in Europe, increasing concerns over the course of inflation and amplifying the dilemma of when to tighten monetary policy. The indirect effect of Russia’s actions on global oil and gas prices threatens to be much more significant. Brent crude prices rose sharply on Tuesday to levels just below $100 a barrel, with wholesale gas prices also up sharply. Most economists think advanced economies have the resilience to emerge without deep scars despite the difficulties.

💡2. Gold prices are likely to test the record set in 2020 as heightened geopolitical tensions over a Ukraine invasion, runaway global inflation and stock market volatility fanned demand for safe haven assets. Spot gold approaches an all-time high of US$2,000 per ounce on haven bids as Russia sends troops into breakaway regions in Ukraine. Higher volatility and geopolitical risks “could trigger more demand for safe haven assets and benefit gold, says strategist at SSGA. The VIX Index, stood at 31.02 on Wednesday, near the record 32 in late January. While, aggressive Fed rate hikes could raise real yields on various assets, dimming the allure of gold that does not earn interest.

💡3. A lack of investment has limited oil and gas producers’ ability to boost output, leaving the world with few options to ease energy prices after the Russian incursion in Ukraine sent oil racing above $100 a barrel. The international oil benchmark Brent rose to $102 early on Thursday, the highest level since 2014. Gas prices have also jumped on rising concern over the escalating tensions in Eastern Europe. The rally could accelerate, analysts say, given big producers’ limited capacity to increase supplies in response to further potential disruptions. “Spare capacity is falling and the [oil] market has to reprice that lack of safety margin,” says JPMorgan analyst, which predicts Brent could rise as high as $125 a barrel in the second quarter of this year.

💡4. HSBC set aside $451mn as it braced for more defaults in the troubled Chinese real estate sector and warned of a slowdown in wealth management due to Hong Kong’s restrictive “zero Covid” strategy, marring otherwise positive fourth-quarter earnings. The bank has made growth in wealth management a cornerstone of its “pivot to Asia” strategy, pledging to invest $6bn in the region and hire thousands of advisers. HSBC increased its dividend and announced it would buy back another $1bn of stock when it completed an existing $2bn programme. It added that it should reach its profitability goal of 10 per cent return on tangible equity a year earlier than expected, in 2023.

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One of the must-ask interview questions for banking and finance is: “Have you read any news recently?”, with the follow-up questions: “How would you link this news to the market and what investment suggestions would you give to your clients based on this news?” 

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Showing your market sense and ability to provide feasible investment ideas would help to differentiate you from other candidates. Therefore, apart from the weekly news update / investment insights, we have also generated this Weekly Market Summary for you to have a quick understanding of the market development and tips to answer some hot discussion topics. Take a look of the summary and WhatsApp us in the group if you have questions.