Finimize - ⚠️ The market's getting risky

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Today's big stories

Russia’s economy is predicted to shrink 10% this year
New analysis from Goldman Sachs suggests there are ways to profit even in a market this risky – Read Now
Business activity in China shrank in March

Sleeping Rough

What’s Going On Here?

Russia’s made its bed: a major financial institution said on Thursday that the country’s economy will shrink 10% this year.

What Does This Mean?

Russia’s decision to invade Ukraine has had serious ramifications for its economy, with one-time frenemies now going all in on crippling sanctions. They've been continuing to reduce their purchases of the country’s oil and natural gas, and foreign investors with money to burn have been boycotting the country altogether. The Economic Bank for Reconstruction and Development (EBRD) thinks it’s having the desired effect: it’s expecting the Russian economy to shrink by 10% this year. And even if the country does agree to a ceasefire sometime soon, it might not help: the EBRD thinks sanctions will stick around to limit the country’s economic growth for the next few years.

Why Should I Care?

Zooming in: It’s everybody’s problem.
Of course, Russia’s invasion is already having far-reaching consequences around the world. And according to the World Bank, it’s the poorest countries that are set to take the brunt of the damage. In fact, the organization reckons soaring prices of products like wheat could push millions into poverty, and some developing countries to a point where they can’t afford to pay their debts. EBRD agrees, and warned that North African economies and Lebanon – which buy a lot of wheat from Russia and Ukraine – are among the most exposed.

The bigger picture: Thanks for nothing, OPEC.
Sky-high oil prices are also poised to stunt economic growth around the world, and yet OPEC – a group of oil-producing nations – said on Thursday that it wouldn’t be increasing its supply any more than already promised. It’s a good job, then, that the US is releasing 180 million barrels of oil – the largest draw from its reserves in its 45 year history – over six months starting in May. That’s not a long-term fix, but analysts think it could bring down prices in the short term.

You might also like: How to protect your portfolio from the effects of the war.

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Analyst Take

How To Reward Yourself In A Market This Risky

Carl Hazeley, Analyst

What’s Going On Here?

Investors rushed back into stocks last week, even though they’re arguably riskier than ever.

After all, inflation, interest rate hikes, and the Ukraine situation are all threatening to send the global economy and stock markets into reverse.

But here’s the thing: new analysis from Goldman Sachs agrees that you don’t need to curl up in a ball and wait till it all blows over.

Because according to the investment bank, there are ways to profit while keeping one eye on the very real risks we’re facing.

So that’s today’s Insight: how to strike the perfect balance between opportunity and caution.

Read or listen to the Insight here

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