2023/02/07 (165) Column

Germany 2023
Our Federal Chancellor Scholz
A True Left-Back


I don’t know if you noticed that abroad, outside of Germany. Because there was already a tsunami of analyses, comments, advice, in all German media (Internet, radio and TV), here at us. Opinion-making until our current Social Democratic Federal Chancellor Scholz, was able to bring himself to deliver German tanks to Ukraine after he had expressed public pressure from his green and/or liberal coalition partners. So that Ukraine can defend its own state sovereignty. Our Federal Chancellor remained steadfast in public – even if many political opponents rated his reticence negatively. Nevertheless, as a German Croat (son of foreign immigrants born here), who sees himself as a politically freedom-loving conservative, I have only good words for him at this point, in today’s column. Because he actually proved himself as a German left-back, if I may use a team sport metaphor, to saved damage from our fellow human beings living here in Germany. Because he only acts militarily if Washington acts with it – delivers. And that’s just as well. Even if many writing colleagues express their wish for a more offensive German Chancellor! A left winger?

Anyone who has ever believed that international politics is not rational is now, also thanks to our Federal Chancellor Scholz, also thanks to our Federal Government, wrong. Admittedly, while the Ukrainians are desperately resisting Russian supremacy, NATO offers what can undoubtedly also be described as a political disaster. Which is why our left-back instinctively and emotionally competent made the delivery of heavy battle tanks to Ukraine subject to conditions. Even if his political opponents denounced this as a new escalation level in the war. Because Berlin only wanted to hand over its coveted Leopards to Kiev if America also made the Abrams tank available. That, in turn, was rejected by Washington. And so both sides, also with the help of us media, played on both sides of the Atlantic, for a short time, what felt like an agonizingly long official Mikado: “Whoever moves first has lost!” The Biden administration hid behind pretexts such as complicated, state-of-the-art technology and claimed that maintaining US tanks would be too much for non-Americans. And Berlin didn’t want to anticipate the war as a left winger for America. And so, in the end, it came as it had to.

Thanks to Federal Chancellor Scholz, the transatlantic official Mikado was resolved in the year 2023, also in the interest of our Federal Republic of Germany, at least in this respect benevolently.
“No, I only move when you move too!”DEVISE 2 DAY 48h
– Last News About What Drives The News Media

A day after the terrible earthquakes in Turkey and Syria that killed more than 8,000 people, the extent of the catastrophe is becoming increasingly clear. Rescue workers searched for survivors under the rubble of collapsed houses on Tuesday. Foreign Minister Annalena Baerbock (Greens) called for all border crossings to Syria to be opened in order to enable the country to receive help more quickly. Turkish President Recep Tayyip Erdogan declared a state of emergency in ten Turkish provinces affected by the quake. Meanwhile, more German relief teams flew to the earthquake area. According to information from Tuesday evening, the number of dead is now around 6,200. According to previous information, more than 30,000 people were injured in southern Turkey and northern Syria. According to estimates by the Pacific Disaster Center, a US disaster relief organization, around 23 million people have been affected by the earthquakes in Turkey and Syria.

While aid has started on a large scale in Turkey, many of those affected in Syria are waiting for rescue teams. Foreign Minister Baerbock said there is currently only one open border crossing, which was damaged in the earthquake. “That’s why opening the border crossings is so important.” All international actors – including Russia – should “use their influence on the Syrian regime so that humanitarian aid for the victims can also arrive there.” No additional hurdles should be set up. A 7.7 to 7.8 magnitude earthquake struck the area on the border between Turkey and Syria early Monday morning. Another 7.5 magnitude earthquake followed in the same area at noon. Thousands of buildings collapsed. Temperatures in the disaster area were around freezing. The Turkish weather service predicted some snowfall and rain. Many cannot return to their homes because they have collapsed or it would be too dangerous to return because of the aftershocks. “This earthquake directly affected 13.5 million of our citizens,” said Turkish Minister of Cities Murat Kurum. Some roads and paths are not accessible, work is being done to make them passable. “The pain is indescribable,” said the minister.
DEVISE 2 DAY Another 48h
– Last News About How Drives The Price Action

Todays Asian Trading Session

Asian equity markets were mixed on Tuesday as investors cautiously awaited Federal Reserve Chair Jerome Powell’s speech at the Economic Club of Washington for clarity about the path for US interest rate hikes. The Reserve Bank of Australia also delivered a widely expected 25 basis point rate hike but said “further increases” would be needed, a more hawkish outlook than markets anticipated. Meanwhile, major companies in the region are set to release earnings results today. Shares in Australia and Japan declined, while Hong Kong and mainland China stocks gained.

Hang Seng Attemps to Recover from Near 1-Month Low
Stocks in Hong Kong climbed 278 points or 1.3% to 21,500 on Tuesday morning trade, partly recovering from a 2% slump while trying to escape from a near one-month low hit in the prior session, boosted by a statement from US President Biden Monday that relations between Washington and Beijing were not weakened after the US shot down a suspected Chinese spy balloon over the weekend. News that China’s Lunar New Year holiday saw a jump in spending and travel activity also encouraged investors to enter new positions, alongside last week’s private survey data showing Chinese services activity bounced back in January. Almost all sectors contributed to the upturn, with healthcare, tech, energy, and basic materials among early movers. Baidu Inc. jumped 12.4%, its highest in 11 months, on a plan to complete internal testing of its ChatGPT-styled project “Ernie Bot” in March. Other strong performers were Longfor Group (5.6%), Country Garden Services (3.7%), Alibaba Group (3%), and CNOOC (2.5%).China Stocks Rise as Sentiment Improves
The Shanghai Composite rose 0.29% to 3,248, while the Shenzhen Component gained 0.12% to 11,927 on Tuesday, recovering from their two-week lows on improved risk sentiment. Investors also reassessed the outlook for monetary policy, with stronger-than-expected US jobs data vying with Federal Reserve Chair Jerome Powell’s disinflation remarks. On Monday, mainland stocks tumbled about 1% as geopolitical tensions flared after the US military shot down a suspected Chinese spy balloon over the Atlantic Ocean. Technology stocks led the rebound, with strong gains from Hanwang Technology (10%), Visual China Group (5.9%), Inspur Electronic (4.3%), Kunlun Tech (6.9%), and Shanghai 2345 (9.9%). Other index heavyweights also advanced, including Wuliangye Yibin (0.7%), JS Corrugating (3%), and People.cn (5.3%).

Sensex Muted Ahead of RBI Rate Decision
The BSE Sensex fell 55.61 points or 0.1% to 60,451.8 in early deals on Tuesday, extending losses from the day before, amid caution ahead of the RBI’s interest rate decision Wednesday. A weak session on Wall Street overnight also weighed on sentiment, with worries building that the US Federal Reserve is likely to stick with its hawkish stance for longer. Losses were limited, however, after JPMorgan said the Adani group companies were still eligible for inclusion in the bank’s bond indexes. Tata Steel sank 4.0%, followed by Hindalco NZ (-3.4%), ITC (-2.5%), and Hero MotoCorp (-1.8%). Shares of Adani Group jumped, as the conglomerate planned to prepay some loans ahead of their maturity in 2024. Adani Enterprises Ltd surged 20%, Adani Green Energy rose 2.7%, while Adani Transmission and Adani Wilmar climbed 5% each. Some Adani group companies will report quarterly results this week, with Adani Ports and Adani Green set to report later today.

Japanese Shares Mixed on Market Caution
The Nikkei 225 Index shed 0.03% to close at 27,685, while the broader Topix Index gained 0.21% to 1,983 in mixed trade on Tuesday, as investors cautiously awaited Federal Reserve Chair Jerome Powell’s speech for clarity about the US interest rate hikes path. The Nikkei reached seven-week highs earlier this week amid a sharp retreat in the yen, which supported the country’s export-heavy economy and made Japanese assets more attractive to foreign investors. The currency weakened on reports that the government had approached Bank of Japan Deputy Governor Masayoshi Amamiya about succeeding Haruhiko Kuroda as central bank head, prompting expectations of the continued BOJ’s ultra-easy monetary policy. Japanese banks and shippers increased sharply on Tuesday, while technology and commodity-linked stocks mostly declined.

Todays European Trading Session

The ruble-based MOEX Russia index was little changed on Tuesday, pausing a seven-day winning streak, as losses across financials and metals & mining stocks offset gains in oil and gas and telecoms equities. Investors continue to digest the latest data showing oil and gas revenues amounted to RUB 426 billion in January 2023, a decline of 46% from a year earlier, primarily due to a decrease in quotations for Urals oil and a drop in natural gas exports. Among single stocks, Gazprom added more than 4% as oil prices advanced for a second day.

Equities in London enjoyed some respite on Tuesday, with the benchmark FTSE 100 bouncing back to end above 7,850 points, driven by gains in the heavyweight energy sector. Oil giant BP surged almost 8% to lead the FTSE 100 after the company reported record annual profits amid higher oil prices last year in the aftermath of the Russian invasion of Ukraine. The surplus of cash prompt the company to raise the dividend and expand the buyback program. On the policy side, Bank of England Chief Economist Huw Pill noted that policymakers were ready to do more to get inflation back to target after suggesting last week that the central bank was nearing the end of its interest-rate hike cycle. On the data front, the Halifax house price index increased by 1.9% from a year earlier in January of 2023, the least since October 2019.

European equity markets closed marginally higher on Tuesday, helped by gains in energy-related shares as oil prices rose for a second day and BP reported a record profit, increased dividend and a $2.75 billion share buyback. On the other hand, industrial shares were under pressure after Berenberg downgraded Airbus SE’s stock to “sell” from “hold”. Among other stocks, BNP Paribas raised its 2025 targets and announced a €5 billion share buyback in 2023, and Ambu’s Q1 earnings beat expectations; while Nordic Semiconductor ASA, sensor maker ams-OSRAM and Siemens Energy posted disappointing results. Meanwhile, investors remained cautious ahead of remarks from US Fed Chair Jerome Powell. Elsewhere, the Reserve Bank of Australia raised its cash rate by 25 basis points to a decade-high of 3.35% and reiterated that further increases would be needed to fight inflation. The benchmark Stoxx 600 went up by 0.15% while the German DAX decreased by 0.25%.French Stocks End Flattish
The CAC 40 index closed virtually unchanged at 7,133 on Tuesday, tracking a general cautious mood, as investors awaited a speech by US Fed Chair Jerome Powell later today. In France, a third day of vigorous protests against President Emmanuel Macron’s widely unpopular plans to raise the legal age of retirement to 64 from 62 disrupted public transportation and railway traffic. Among single stocks, Renault (+4.4%) and TotalEnergies (+3.4%) led the gains. Also, BNP Paribas gained nearly 3% as it reported a 7% rise in net income for 2022 and revised up its profit targets. On the opposite side, Carrefour (-5%), Eurofins Scientifique (-4.6%) and Airbus (-3%) were the top losers.

Italian Stocks Rise for 2nd Day
The FTSE MIB index rose about 0.4% to close at 27,119 on Tuesday, the second straight session of gains, with investors weighing more economic data and corporate results. In the meantime, traders awaited Federal Reserve Chairman Jerome Powell’s speech expected today at the Economic Club of Washington while there are fears that the Fed could raise interest rates well above 5% and that it could keep them at those levels for longer. Among single stocks, Saipem was the top performer, adding 5.2%, followed by Telecom Italia (+2.3%), thanks to the “buy” recommendation from Equita which shows confidence in the success of the corporate reorganization project with the offers on the incoming network.

Spain Stocks Close Higher after 2-Day Losses
The Ibex35 index rose to 9172 on Tuesday, recouping some of the previous losses thanks to the gains in the financial and energy sectors. Repsol and Enagas shares increased by the respective 1.69% and 1.08% after oil prices grew for the second day, and BP, one of the leading oil and gas “supermajors”, posted record profit results. Meanwhile, Banco Santander advanced by 2.16%, as HSBC analysts said the entity presented the greatest margin for increases in 2023. UNICAJA and Banco Sabadell followed, up by around 1%. The biggest decliners were Amadeus -2.74%, Indra Sistemas -1.57%, IAG (-0.82%), and Solaria Energia Y (-0.81%). On the domestic data front, industrial production in Spain surged by 0.6% year-on-year in December 2022 against the market forecasts of a 0.6% fall. Globally, investors remained cautious ahead of today’s US Federal Reserve chair Jerome Powell speech, which could shed light on the future rate path.Todays US Trading Session

The trade deficit in the US widened to $67.4 billion in December 2022 from a downwardly revised $61 billion in November which was the lowest since September 2020. Figures compare with forecasts of a $68.5 billion gap, with exports falling 0.9% to $250.2 billion, led by nonmonetary gold, crude oil and foods, feeds and beverages while imports rose 1.3% to $317.6 billion, prompted by purchases of cell phones and passenger cars. Considering the full 2022, the US trade deficit went up to a record high of $948.1 billion, equivalent to 3.7% of the GDP from $845 billion in 2021, as rising inflation, high energy prices and robust demand pushed imports to the highest level ever. The goods gap widened by 9.3% to $1191.8 billion while the services surplus narrowed 0.6% to $243.7 billion. Exports of goods increased 17.7% to $2,085.6 billion and imports jumped 16.3% to $3,277.3 billion, both led by crude oil. The deficit with China widened to $382.9 billion and the one with Canada to $81.6 billion.

Wall Street failed to hold its upside momentum on Tuesday, with all three major US stock indexes crossing into negative territory, as investors digest Fed Chair Jerome Powell’s remarks at the Economic Club of Washington. The head of the US central bank reiterated that the disinflationary process has begun and that the Fed has the tools to bring down inflation to its 2% target. At the same time, the chair warned that if robust labor data persists, the terminal level of the Fed funds may be higher. On the corporate side, Chegg plunged 20% after the education technology company offered disappointing guidance.

Wall Street Ends Higher after Powell’s Speech
The Dow finished more than 260 points higher after it pared 250 points losses during the session. Meanwhile, the S&P 500 and Nasdaq 100 gained 0.6% and 0.9%, respectively, as investors digest Fed Chair Jerome Powell’s remarks at the Economic Club of Washington. The head of the US central bank reiterated that the disinflationary process has begun, particularly in the goods sector, while saying that the Fed has the tools to bring down inflation to its 2% target. At the same time, when asked about the strong January jobs report, Powell’s comments did not suggest that it would change the central bank’s approach to future rate increases. However, he warned that if robust labor data persists, the terminal level of the Fed funds may be higher. On the corporate side, Chegg plunged 17.1% after the education technology company offered disappointing guidance. Hertz and DuPont rose almost 7.5% and 7.4%, respectively, on the back of earnings that topped expectations.US Economic Optimism at 10-Month High
The IBD/TIPP Economic Optimism Index in the US increased to a ten-month high of 45.1 in February of 2023 from 42.3 in January, but remained in pessimistic territory. 53% of adults now think the U.S. economy is in a recession, down from 55% last month. The six-month outlook for the US economy increased to 39.7 from 36.2. The personal finances subindex also went up to 52.6 from 49.9, striding back into optimistic territory and the gauge of support for federal economic policies held rose to 43.1 from 40.7. “This month’s indexes provide good reasons to be cautiously optimistic about the economy in 2023. With the exception of financial-related stress, all indexes improved, with some entering positive territory for the first time in several months. Although spending cuts remain in effect, fewer people think we’re in a recession, and we’re seeing significant increases in the number of people who believe the economy is improving”, ” said Ed Carson, IBD’s news editor.

Powell Says Interest Rates Are Likely to Rise Further
Fed Chair Jerome Powell reiterated that the disinflationary process has begun, particularly in the goods sector, and that the Fed has the tools to bring down inflation to its 2% target when speaking at the Economic Club of Washington. At the same time, when asked about the strong January jobs report, Powell’s comments did not suggest that it would change the central bank’s approach to future rate increases. However, he warned that if robust labor data persists, the terminal level of the Fed funds may be higher. The Federal Reserve raised the target range for the fed funds rate by 25bps to 4.5%-4.75% in its February 2023 meeting, dialing back the size of the increase for a second straight meeting but still pushing borrowing costs to the highest since 2007.

DXY Loses Upside Momentum
The dollar weakened against a basket of major currencies on Tuesday, pulling back from a one-month peak of around 104 to hit a session low of 103, as remarks from Fed Chair Jerome Powell spooked investors. The head of the US central bank once again reassured markets that the disinflationary process has begun, particularly in the goods sector, while saying that the Fed has the tools to bring down inflation to its 2% target. At the same time, when asked about the strong January jobs report, Powell’s comments did not suggest that it would change the central bank’s approach to future rate increases. However, he warned that if robust labor data persists, the terminal level of the Fed funds may be higher.DEVISE 2 DAY 48h
– Where I Was Wrong, Where I Was Right

This week is likely to be somewhat weaker for equity markets around the world. Because the development in individual stock markets, distributed around the world, is almost in the double-digit percentage range. As such, price losses should be taken as an exhale for this week’s run. Regardless of our open running trading capabilities, I am always trying to identify further 4XSetUps. I have UKOIL at the top of my watch list. But I still don’t dare to formulate a new 4XSetUp trading capability. Because all open 4XSetUps trading capabilities are currently traded in profit. And I don’t want to formulate a 4XSetUps because I’m too greedy and/or can’t get enough of it.

However,
Today Brent Crude Rise To Approach $83
Brent crude futures rose nearly 2% to above $82 a barrel on Tuesday, following a 1.3% gain in the previous session, on concerns about supply disruptions and as investors anticipate a rise in demand in China. The terminal at Turkey’s Ceyhan port, which exports Azeri crude oil is set to be closed until Wednesday as a precaution after major earthquakes hit the country. Also, Saudi Arabia raised crude prices for Asian markets for the first time in six months as they see a stronger demand, especially from China. At the same time, traders try to assess the impact of a European ban on seaborne imports and price caps for Russian oil products that came into effect on Sunday.