2022/09/06 (063) Column

„Mo`, my brother!
– That’s it …“


Mo`, my brother! That’s it …

Fed Powell indirectly acknowledges past mistakes – that many people have not only lost jobs because of his decisions but also have to live with higher prices, even inflation, indirectly because of the decissions of the Fed – and grabs the WallStreet bulls very firmly by the horns. Accepted! Bought Jerome! But what are we market guys supposed to do with these words? As stocks interested in buying shares on Wall Street? Or wait to buy even cheaper in a few days, weeks, months? Yes, may be even sell shares?

In addition to the speech by the Fed chief in Jackson Hole the week before last, the speech by Mohammed El-Erian stuck in the back of my mind. Who was and is of the opinion that the Fed had slept at the wheel. And do not shy away from doing the right thing. The former Pimco boss was harsh in his speech in Jackson Hole and calls for more courage about to fight inflation. “The Fed is so late that it faces 2 challenges: getting the inflationary genie back in the bottle and not doing too much damage to economic growth and inequality,” said El-Erian, currently chief adviser to Allianz, on Thursday, the day before the FED Powell speech, on Bloomberg Television’s “Surveillance” program. And he’s right. Because now the establishment, by which I mean all the major media and/or institutes, from the public sphere, the market, i.e. the so-called mass of (un)participating financial market participants, is expecting that the Fed will finally implement and/or conserve restrictive monetary policy. What is true. No problem. But most observers, let alone Wall Street commentators, are not even thinking about a restrictive US fiscal policy. Let alone write about it. Because I truly see the real root of the problem in the excessive US fiscal policy; such as the recent student debt relife of Sleepy Joe.

Although I sometimes feel like Abelsohn – as a political child and also a supporter of the US Republicans and or above all Ronald Reagan, as well as Donald J. Trump – and devalue Biden’s expansive fiscal policy as a revanchist Kain policy, I’m glad at least having found some (un)spoken brothers in spirit. Because the green fiscal policy is and/or was the main cause of US inflation. Also, even if many colleagues (un)consciously (un)intentionally want to sell it to us to the contrary. So I’m really glad that the Fed is finally showing its determination to fight inflation. It’s near a 40-year high. If not yet, whenever!? Because the US Inflation has been increasing since Sleepy Joe and his green social democrats declared economic war on the black energy industry. That’s why I’ve been very happy to catch myself as a lawyer for the FED ever since. Because we were all there as live observers, since Sleepy Joes inauguration as US President in 2021. And back then, US inflation was pretty much 2% before he enacted the green socialdemocrats laws, under the cloack of democracy.

“Federal Chair Jerome Powell faces a ‘huge’ challenge trying to contain inflation without hurting the economy,” Mohamed El-Erian said ahead of Powell’s speech at the Jackson Hole conference on central bankers. And added aptly: “The US Federal Reserve “must not back down” when it comes to combating overheated inflation.“  There’s nothing more to add at least not on my part. Hold on! Yes, I have one more thing, my conservative freedom-loving (religiously) right-wing friends, scattered around the globe, friends of the US Republicans. Trump friends – Trump enemies. You may also argue for or against it. In whatever matter…

DEVISE 2 DAY 48h – Last Market Price Actions

Dollar Hits Fresh 20-Year Peak
The dollar index gained further ground above the 110 mark, reaching levels not seen since June 2002, as investors brace for more interest rate hikes from the Federal Reserve. The US central bank signaled that it would prioritize the fight against inflation over growth headwinds, with markets currently priced for another 75 bps rate increase this month. On top of that, recessionary fears in the eurozone exacerbated by aworsening energy crisis and fresh coronavirus-induced lockdowns in China also drove safe-haven flows into the dollar. This dollar’s strength was seen across the board, but some of the most pronounced buying activity was against commodity-linked currencies such as the Australian and New Zealand dollars.

Wall Street Resumes Selloff
The Dow lost almost 300 points on Tuesday, and the S&P 500 and the Nasdaq declined 0.5% and 1.3% as investors adjusted their portfolios for further interest rate hikes from the Federal Reserve. The US economy has been showing signs that it remains resilient to such tightening, with the US services industry picking up again in August for the second straight month. Such data followed last’s week solid job report, with markets currently priced for another 75 bps rate increase this month. Falls were once again most pronounced in high-growth stocks, with mega-cap names such as Meta Platforms, Google-owner Alphabet, Amazon.com, Microsoft, Apple, and Tesla trading in negative territory as soaring bond yields spooked investors. In other corporate news, CVS Health announced that it would purchase Signify Health for almost $8 billion, and VW revealed its intention to list Porsche in an IPO.

Italian Stocks Close Flat
The FTSE MIB index closed a choppy session flat at 21,480 on Tuesday, failing to recover from yesterday’s sharp retreat as investors continued to weigh on how declining energy supplies may affect European economies ahead of higher borrowing costs by the ECB. Energy stocks booked the sharpest losses in the session, with Eni and Tenaris tracking lower crude prices to drop 3.5% and 2.7% on average. Utilities also closed sharply in the red, led by a near 5% drop for Hera after the Italian government announced it will reduce heating in households and stores to save gas in the winter, forecasting consumption to be reduced by 5.3 million cubic meters. On the other hand, sharp gains for banks and tech offset energy-related concerns. Pirelli and Stellantis added 3% and 1.5%, respectively, while Nexi shares jumped 1.6%.

European Shares Enjoy Respite
Most major European bourses gained some ground on Tuesday, with the regional STOXX 600 and the DAX 40index adding 0.8% and 0.2%, respectively, with consumer discretionary and materials stocks among the top performers in both indexes. In the lack of any significant catalyst, investors took advantage of lower valuations following Monday’s meltdown while assessing the region’s recession risks exacerbated by a worsening energy crisis. Regarding individual price movement, Hellofresh and Volkswagen lead gains on the STOXX 600 index, up roughly 5% and 4%, respectively.

French Stocks End Cautiously Higher
The CAC 40 index pared early gains to close slightly higher at 6,105 on Tuesday, following a 1.2% decrease in the previous session, as investors weighed economic measures unveiled by several European countries to help cushion the blow from inflation and the energy crisis. Meanwhile, caution prevails ahead of the ECB meeting later in the week, at which policymakers are set to raise interest rates again and by a larger margin. On the data front, a PMI survey showed France’s construction sector contracted for a third consecutive month in August. Among single stocks, Worldline (+3.1%), Alstom (+2.3%), Publicis Groupe (+2.1%) and Renault (+2.1%) were the biggest gainers, while TotalEnergies (-2.8%) and Engie (-0.9%) underperformed.EVISE 2 DAY Another 48 Hours – Where I Was Wrong, Whre I Was Right

Long in the USDX (since 02/14/2002) around 96 points and/or also long MSFT (since 03/07/2022) around 285 USD are meanwhile our only two open long trading capabilities. In addition to our last long in the Dow Future at 31.140 points (since 07/11/2022). After we realized our profits at 33.500 points (on 08/22/2022) – with 2.360 points at least. After our big long FB trading capability (from 02/17/2022) end of june`22 with painfully 48 USD. Fortunately, MSFT stock had turned above our stop at 240 USD. Since the start of august i formulated a long trading capability also. So that we have 2 financial market price actions on play, this week! USDX long; MSFT long; and/or UKOIL short once again.„Crazy Prices and/our sour apples“,
that`s how i describe not our commitment to date, but much more aklso the current price action development in the oil market, even especially in ukoil. However, we`ll try an old newshort trading capability; after in the last short one the market kicked us out above 100 USD – at that on my 44th birthday (on 08/29/2022). Even as i wrote: „Crazy prices and/or apples, in oil price action!“