2022/12/25 (133) Column

Has the Fed Done
Its Duty in 2022?


Undoubtedly, inflation was the most persistent and worse problem in 2022 than was thought at the beginning of the year 2022. While at first publicly spoken about as temporary in the eyes of most central banks, most central bankers openly admit that inflation is a larger, longer-lasting problem. The green energy policy of the US Democrats, under the watch of Joe Biden, was rightly blamed at the beginning on the high energy prices in the US. Just the green politics of most democrats in our so-called west. Even also in the euro zone, yes even above all in my home country Germany, with the help of a green, left-liberal federal government. So that we no longer need to discuss the cause of the significantly increased energy prices as the cause of inflation. But then came Russia’s war of aggression in eastern Ukraine, which inevitably drove up commodity prices even further, so that we can perceive an ambivalent parallelism with the course of the war and inflation in our so-called West. But that’s just the cream, on the bitter coffee; if I may can use this metaphor. The bitter cream, the premium on commodity prices of Russia’s war of aggression against Ukraine. And the bitter coffee, the left green politics, of our political class, on our so called West. That was the alchemie of our inflation. On the one hand, they green left liberal policy only know about tax increases for the majority of the population. And on the other hand their state-politically desired lack of cheap black oil drives up consumer prices, due to superficial green moral overconfidence. Which also drove prices up in 2022.

Few base effects are likely to occur while next year 2023, so that we have already experienced the peak in terms of inflation in the US, for better or for worse. In contrast to the euro zone, to my home country Germany, and/or also, for example, for the United Kingdom. If inflation were not to rise further in 2023 than in 2022 and base effects would therefore occur over a twelve-month period, inflation should then weaken again on its own. As already started in the US. And that`s why I currently tend to have rather asymmetrical bearish expectations for the USD even interest rates exceptations on next year 2023. Because the FED has already largely settled its obligations in relation to the year 2022, at least in my opinion! In contrast to US fiscal policy – and/or but also green US energy policy! But that in another column, sooner or later…
DEVISE 2 DAY 48h
– My Last Thoughts Abot Market Price Actions

This week looks set to be a relaxed week in terms of new old central bank informations. Only the South American Central Bank of Uruguay, the BCU (Banco Central del Uruguay) will hold its regular monthly meeting again on Friday – and publish its interest rate decision. The major central banks of the most traded currencies will not meet again until next year, 2023. The BOI and also NBP start next week. On Monday, the 2nd the BOI (Bank of Israel) wilö start the yeaor 2023. Following, by the Poland`s NBP (National Bank of Poland) on Wednesday, the 4th. As one of the major central banks. Our long GBPUSD 4XSetUp trading capability closed in profit last week. So that we currently have no open 4XSetUp in the forex market. After we were also able to make a very good profit in DXY in the course of 2022. For a new long 4XSetUp trading capabolity in GBPUSD i would wait until next days and/or weeks.

However, in the last week of 2022 the focus will shift to stocks as there would be very few important economic releases. Investors are hoping that the stocks will stage the Santa Claus rally, bringing some respite to the markets. In the US, housing data and several regional PMI readings will take center stage. Also, Japan will release retail sales, industrial production, and unemployment rate while in South Korea, Spain, and Russia the focus will be on inflation rates. In the Financial Markets 4XSetUps I have put once again 5 more stocks from our german DAX40 index, this week. As well as XETR-MRK (Merck) on sunday, XETR-MTX (MTU AERO AUTOTEILE) on monday, XETR-MUV2 (MUENCHENER RÜCKVERSICHERUNG) on tuesday, XETR-PAH3 (PORSCHE) on wednesday, an/or XETR-PUM (PUMA) on thursday, you can get an detail overview of until 18 different pov`s (point of views) about the price action of every single share As far as the Technical Analysis 4XSetUps are concerned, i will focus us only to the Dow Jones Industrial Average Index, the Dow Future, CBOT_MINI-YM1!, this week. Since we were ripped out of all 4XSetUps, last week. So let us first formulate our basic expectations for 2023, this week.DEVISE 2 DAY Another 48h
– Some Last News About Market Price Actions

Wall Street Cut Early Losses
The Dow Jones erased early losses and hovered 100 points higher while the S&P 500 was 0.3% up on Friday with support from energy shares, as investors continued to digest the latest economic data for hints on the Federal Reserve’s path. The core PCE price index, the central bank’s preferred inflation gauge, slowed broadly in line with analysts’ expectations in November. Meanwhile, personal spending edged higher from the prior month and durable goods orders shrank the most in two years. Still, concerns that the Fed will maintain its hawkish guidance for next year persisted after GDP growth and PCE inflation figures were revised higher yesterday, pressuring the tech-heavy Nasdaq to underperform and hover below the flatline. So far in December, the Dow Jones is down 4%, the S&P 500 shed 5.9%, and the Nasdaq tumbled 8.7%, with the three major averages on track for their worst yearly performance since 2008.

European Bourses Close Week on a Muted Note
European equity markets closed roughly flat in choppy trading on Friday, after losing nearly 1% in the previous session, as traders continue to worry that interest rates will need to stay elevated for a longer period, which could hurt the economy even further. Gains across basic materials, real estate, industrials and energy were offset by losses in consumer, technology and utilities shares. On the week, the region-wide STOXX 600 added 0.6%, after two straight weeks of losses. Major bourses in Europe will be closed for a holiday on Monday.

UK Stocks Little Changed Ahead Long Weekend
The FTSE 100 closed little changed in a shortened session on Friday, after a 0.4% loss the day before with the energy sector leading gains. Also, auto stocks added 0.4% after the latest data showed UK car production rose 5.7% in November, the second straight month of increases. In corporate headlines, Hurricane Energy Plc rose 2.6% after activist investor Crystal Amber Fund sent a notice to the group to convene a general meeting proposing leadership change. On the week, the London index advanced almost 2%. The London Stock Exchange will be closed on Monday and Tuesday for the holidays.

Russian Stocks Close Week Lower
The ruble-based MOEX Russia index closed flat at 2,124 on Friday, notching a 0.4% retreat on the week as losses for oil shares offset gains for metallurgists as investors continued to assess the grim outlook for the Russian economy. Oil producers Surgut and Transneft slid nearly 2% each to lead the losses in the sector as soaring Covid cases in top consumer China and Western sanctions dent demand for Russian energy. Data by Reuters showed that exports of oil from Russian Baltic ports are expected to decline by 20% month-on-month in Dec`22 amid the start of the EU’s oil embargo and the G7’s EUR 60 price ceiling.

Turkish Stocks Extend All-Time High in December
The Borsa Istanbul 100 index continues to break fresh record highs to trade above the 5400 level in December, as investors keep on using equities as a hedge against surging consumer prices and a plunging lira and Turkish residents sought assets to store their savings. The Central Bank of Turkey paused the rate-cut cycle and left the one-week repo rate unchanged at 9% on December 22nd, following a 1000bps cut since September of 2021. Meanwhile, inflation rate remains elevated although it slowed for the first time in 18 months to 84.4% in November, from 1998-highs of 85.5% in October. The Borsa 100 index is up nearly 180% so far in 2022. On the corporate front, Turkish Airlines are among the top performers, up more than 570% year-to-date.

Brent Crude Rises 3.6%, Books 2nd Weekly Gain
Brent crude futures surged 3.6% to near $84 per barrel on Friday, on the prospect of lower crude supplies from Russia. Russia’s Baltic oil exports are predicted to decline by 20% month-on-month in December and the country may reduce output by 500,000 to 700,000 barrels a day in early 2023 after the European Union and G7 nations imposed sanctions and a price cap on Russian crude. The oil market gained for the second straight week, on signs of tightening US crude supplies and an improving demand outlook in top crude importer China. Latest data showed that US crude inventories fell by 5.89 million barrels last week, much more than market forecasts for a 1.66 million barrel drop. Still, investors remain worried about surging Covid cases in China that could disrupt economic activities, as well as the prospect of a global economic slowdown next year.DEVISE 2 DAY 48h
– Where I Was Wrong, Where I Was Right

A super exciting year 2022 is coming to an end! And regardless of our (not) successful 4XSetUps trading capabilities, I would like to thank each and every reader here. Because if you, yes you, didn’t read my DEVISE 2 DAY daily, every day, then financing my newspaper wouldn’t be worth it for me. Let alone for my nine online brokers.

For the last week I will focus on the DJI (Dow Jones Industrial Average Index); even the Dow Future, the CBOT_MINI-YM1!. Nevertheless, I will also want to give us a detailed overview of the GBPUSD pair again. But don’t want to formulate new 4XSetUps trading capability. Because I think it would make more sense to let the last week expire first. And then in January 2023, sooner or later, go long/short again.

Anyway, the DJI (Dow Jones Indistrial Average Index) was the best stock market in the US last year 2022. And that, fundamentally argued, quite rightly so. Because the least vulnerable companies are listed in this  stock market, which many colleagues refer to as zombie companies. So as a company that cannot refinance your liabilities and interest from earnings let alone cash flow. Because that is one of the most crucial fundamental points of every stock valuation in an environment of higher interest rates. And that’s why I generally prefer the DJI (Dow Jones Industrial Average Index) over the NASDAQ for 2023 again. Because I perceive a lower downside risk in the DJI than in the NASDAQ. Precisely because of the refinancing problems that have just been formulated for many technology companies that are listed in the NASDAQ. However, we will observe, analyze and evaluate in every issue, including in 2023, how far the DJI can rise and/or perform better than the NASDAQ in 2023. To formulate new old 4XSetUp trading capabilities regularly…