Apple picker Press Release: On Wednesday, May 26, XTB organized a meeting of experts from the world of finance and investments. The main theme of this year Analytical forum was the situation in the markets in the post-covid era and how to approach investments in this situation. The lively debate of financial analysts and economists therefore aimed to prepare the listeners for the following months and provide them with the most accurate and comprehensive information on which to base their investment strategies. They talked about macroeconomic and stock topics, commodities, forex, as well as the Czech crown and cryptocurrencies.
The discussion during the online conference was moderated by Petr Novotný, editor-in-chief of the financial portal Investicniweb.cz. Right from the start, the talk turned to inflation, which now dominates most macroeconomic news. One of the first speakers, the chief economist of the Roger Payment Institution, Dominik Stroukal, admitted that it surprised him, contrary to last year's forecasts. "Inflation is higher than I would have expected and than most models showed. But the reaction of the Fed and the ECP is not a surprise, because we are facing a textbook question whether to puncture the bubble or not. Because we all know what would happen if we started raising rates very quickly, so the current situation is considered a temporary trend," stated His words were also confirmed by David Marek, chief economist at Deloitte, when he said that the rise in inflation is temporary and it only depends on how long this transition lasts. According to him, the reason is the acceleration of the Chinese economy, and above all its demand, which is sucking up the commodities and transport capacities of the entire world. He also added that the cause of the increased inflation could also be stuck supply chains on the supply side, especially the lack of chips and the rapidly rising prices of container shipping.
The topic of inflation was also reflected in the discussion of forex and currency pairs. Pavel Peterka, Ph.D. candidate in the field of applied economics, believes that higher inflation increases riskier currencies such as the Czech koruna, forint or zloty. According to him, rising inflation creates room for the CNB to raise interest rates, and this strengthens interest in riskier currencies, which profit from this and strengthen it. At the same time, however, Peterka warns that rapid change can come with decisions by larger central banks or a new wave of covid.
From the evaluation of the current events in the markets, the discussion moved to considerations of the most appropriate approach. Jaroslav Brychta, chief analyst of XTB, spoke about the investment strategy on the stock market in the following months. "Unfortunately, last year's wave of cheap stocks is behind us. Even the price of shares of American small caps, small companies producing various machines or doing business in agriculture, is not growing. It makes far more sense to me to go back to the big tech companies that seemed extremely expensive last year, but when you compare it to the smaller companies, Google or Facebook don't look that expensive in the end. In general, there are not many opportunities in America at the moment. Personally, I'm waiting and waiting to see what the coming months bring and I'm still looking at markets outside of America, like Europe. Smaller companies are not so growth-prone here, but you can still find interesting sectors, for example construction or agriculture - they have a net cash position and make money," outlined Brycht.
In the second half of the Analytical Forum 2021, individual speakers also commented on large increases in the commodity market. This year, in some cases, commodities are starting to outpace fundamentals. The most extreme example is construction wood in the USA, where both demand and supply factors have come together. So this market can be cited as a prime example of a correction phase where prices have risen to astronomical heights and are now falling. Even so, commodities can be considered the best inflation hedge of all investments. Štěpán Pírko, a financial commentator dealing with stock and commodity markets, personally likes gold because, according to him, it works very well even in the event of deflation. It therefore makes sense for him to have gold represented in the portfolio to a much greater extent than cryptocurrencies. In any case, according to him, chests of drawers cannot be lumped together and it is necessary to be very selective.
According to Ronald Ižip, at the time of the commodity bubble, which, as most participants agreed, prevails on the commodity market, US bonds are cheap and therefore good for long-term holding. According to the editor-in-chief of the Slovak economic weekly Trend, they are the primary collateral, just like gold, and therefore have the ability to find a balance on their own. But in the case of holding these two commodities, he warns of panic in the financial markets, when large investors start selling gold to get cash. In that case, the price of gold will start to fall. Since he does not expect such a situation in the future, he recommends that investors include US bonds and gold in their more conservative portfolios instead of technology stocks.
The recording of the analytical forum is available to all users free of charge online by filling out a simple form at this page. Thanks to it, they will get a better overview of what is happening on the financial markets and learn useful tips regarding investments in the current post-covid era.
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