2023/02/21 (175) Column

Learning To Live
That Everything Does Not Always Go
According To Your Own Ideas!


The stock market is a great field of activity to grow up. So to realize that the price action doesn’t always go in the expected direction. A good exercise against the infantile narcissistic ego that promises us a perfect self-image. And everything demonized when we have to admit that we are imperfect financial market participants – like any other fellow human being, in whatever activity.

That`s why, don’t be discouraged by the current macroeconomic environment, in the first quarter of 2023, my dear loyal readers. It is as the two analysts Ajay Rajadhyaksha and Amrut Nashikkar, of the British bank Barclays, put it so aptly the other day: “If 2022 was the year of political ‘shock and fear’, 2023 will be the year in which one have to live with it”. Unfortunately, an end to the war in Ukraine is not (yet) in sight. Since both parties are not (yet) ready to sit down together at the table and negotiate a contract. Unfortunately, both warring parties are therefore likely to extend the scenario even further. So that we here in Europe this year 2023 are likely to remain in the political pit before further energy problems. And/Or China too, growing almost as slowly as it could possibly only grow in the pandemic-weakened year 2020. US housing market activity has also now collapsed and inflation is forcing central banks, in our so-called West, to raise interest rates at a dizzying rate! Is that going well for our stock markets?

Regardless of whether we have already experienced the lows in the US stock markets, on Wall Street, in the summer of 2022 or not, I, as a permanent optimist, am now assuming that, for better or for worse, we will see such low GDP figures in the 4 quarters of 2023, as has been the case since the 2008 financial crisis. However, due to the aid programs of the various national governments, it is unlikely to be as bad as it was then. The two Barclays analysts, for example, expect the global economy to grow by 1.7 percent in 2023, a significant slowdown from growth of more than 6 percent in 2021 – and a significant decline from expected growth in 2022 of 3.2 percent. The advanced economies are also heading towards a recession, above all the euro area and the United Kingdom. Barclays said inflation, on the other hand, is “likely to decline slowly,” with consumer prices expected to rise an average of 4.6 percent globally in 2023. Nevertheless, I believe that Fed Chair Man Powell’s monetary policy, also with the help of US Treasury Secretary Yellen’s fiscal policy, will ensure that US inflation at least reaches the target of 2% by the end of 2023.

Despite already falling in 2022 on US inflation worries, equity markets, on Wall Street, may fall further. Although the scenario from the summer of 2022 was almost textbook – almost the same high in US inflation as the lows in the US stock markets. For US fixed income yields, I believe we’ve already traded the highs as well. However, even more than me conservative market guys, in the current year 2023, as in the previous year 2022, can overweight yields over stocks. Because I don’t assume that the FED will lower its interest rates in the current year 2023. Let alone the ECB, for our euro zone. The real return winners in 2023 should finally be monetary values again. Because short-dated US bonds at the front end of the yield curve could achieve yields of up to 4.5 percent and thus remain profitable for several quarters. The ability to generate more than 4 percent returns with virtually zero risk is likely to be a factor that, while still likely to weigh on the stock markets in New York. However, not as strong as other currency areas, such as the United Kingdom and/or our euro zone.

From today’s perspective, I am no longer fundamentally optimistic about our long-term 4XSetUps trading capabilities for the Dow Future, dax Future and eurusd. Because the last US inflation figures have more than disappointed me. Because all my 4XSetUps were based on a fall in US inflation to 2% at the end of the year! But will we also experience this at the end of this year 2023? And that always with the certainty in the back of our mind that everything can go differently as we imagined – as we excepted – and have positioned ourself accordingly on the financial market? I don’t know the future! That’s why don’t blame me, if I don’t have the nerve to keep our 4XSetUps long throughout 2023, as I originally wanted to do at the beginning of 2023…
DEVISE 2 DAY 48h
– Last News About What Drives The News Media

Putin’s State of the Union address – How does Biden react?
Biden warns Putin against attacking NATO
Biden in Poland: NATO is “stronger than ever”Putin’s State of the Union address – How does Biden react?

In a speech shortly before the anniversary of the Ukraine war, Russian President Vladimir Putin announced the suspension of the last major nuclear disarmament treaty with the United States. The Kremlin chief said in his State of the Union address in Moscow on Tuesday that it was not an exit from the “New Start” treaty from 2010, but a suspension. Relations between the US and Russia are at a low point because of the Russian war of aggression against Ukraine.

Although he himself ordered the invasion of Ukraine on February 24, 2022, in his speech Putin repeatedly blamed the West for the war. “They started the war,” he said to Western countries. Russia is only trying to end the fighting, the Kremlin chief claimed in his speech to the Federal Assembly. This consists of the State Duma and the Federation Council. Church leaders such as Russian Orthodox Patriarch Kirill, military officials and artists also listened to the speech in Moscow. There was much applause for the President; but there were also many motionless and petrified expressions to be seen.

Putin once again said that a “neo-Nazi regime” was in power in Ukraine. The “special military operation” – as Moscow calls the war – will be continued. “Step by step, carefully and consistently, we will solve the tasks ahead of us.” The 70-year-old also announced a modernization of the Russian army. “The level of equipment of Russia’s nuclear deterrent forces with the latest systems is now 91.3 percent,” he said. This level of quality should also be achieved in the other parts of the armed forces.

Putin promised financial help to those who fought in the war and their families. He also promised the annexed areas in the east and south of Ukraine reconstruction and jobs. There will be new programs to develop the four “new subjects”. So far, Russia has only controlled part of the illegally annexed areas of Luhansk, Donetsk, Zaporizhia and Cherson. Ukraine has announced that it will liberate the areas again.

Biden in Poland: NATO is “stronger than ever”

In Warsaw, US President Biden first emphasized the strength of NATO. “It is the most important alliance, I would say, perhaps the most important alliance in history,” he said in a conversation with Poland’s head of state Andrzej Duda. A year after the start of the war, NATO was “stronger than ever”. Duda, for his part, thanked Biden for the US troops stationed in Poland and his visit to the In Ukraine, the head of the presidential office, Andriy Yermak, commented on Putin’s speech on Telegram: “They (the Russians) are strategically at an impasse. Our job is to get them out of Ukraine and punish them for everything.” For Putin, it was his 18th address to the nation. He last held her in April 2021. She had dropped out last year; the head of the Kremlin explained this after the start of the war with the “dynamics of events”. On Tuesday, the speech was also a kind of long-distance duel with US President Joe Biden. This afternoon he wanted to speak in the Polish capital of Warsaw on the upcoming anniversary of the Ukraine war. The day before, Biden had visited Kiev and pledged further support to Ukraine.

Biden warns Putin against attacking NATO

Long-distance speech duel before the anniversary of the Russian attack on Ukraine: In Moscow, President Vladimir Putin announces the suspension of the last major nuclear disarmament treaty – in Warsaw, US President Joe Biden evokes the strength of democracy. A day after his demonstrative visit to Kiev, Biden’s performance in Poland is a tribute to one of Ukraine’s most consistent supporters. Meanwhile, ahead of its announced peace initiative for Ukraine, China is making ever stronger fronts against the United States. Beijing accuses Washington of deliberately fueling the conflict.

In his State of the Union address, Kremlin chief Putin said that moving away from the 2010 New Start disarmament treaty with the United States was a suspension, not an exit. He accused the US of “theatre of the absurd” – because Washington accused Moscow of not allowing experts to inspect nuclear defense systems into the country. If, in times of such tensions, the West expects Russia to grant access, that’s “nonsense,” said Putin.

The “New Start” treaty limits the nuclear arsenals of both countries to 800 delivery systems and 1,550 operational warheads each. In addition, it is regulated that Washington and Moscow can exchange information about their strategic nuclear arsenals and hold up to 18 verification visits per year.

US Secretary of State Antony Blinken called the announced suspension “extremely regrettable and irresponsible”, but expressed further willingness to talk about strategic arms limitations. “We will closely monitor what Russia is actually doing,” he added, according to a transcript in Athens released by the Foreign Ministry. In any case, the USA would ensure that its own security and that of its allies was guaranteed.
Ukrainian capital of Kiev on Monday. This boosted the morale of Ukraine’s defenders, Duda said. “But it was also a remarkable gesture towards our allies in NATO and the people who are on the side of the free world.”

Biden visited symbolic places in Kiev together with Ukrainian President Volodymyr Zelenskyj on Monday. He promised Ukraine continued US support. In a speech in front of the symbolic Warsaw Royal Castle, he wanted to emphasize the power of democracy, according to US information on Tuesday.
DEVISE 2 DAY 48h
– Last News About What Drives The News Media

The pre-market earnings figures, which were mostly disappointing, are heavy on Wall Street’s stomach after the long weekend. Home Depot can only beat earnings targets thanks to low tax rates, but it has to lower its fiscal 2023 outlook. While Walmart has a solid fourth quarter, it is capping earnings targets for the current quarter and for fiscal 2024. Fluor again missed targets for the past quarter by a wide margin, with the stock down nearly 10%. It is conceivable that the economic data due at 15:45 CEST will support Wall Street. February flash manufacturing and service PMIs were ahead of targets in Europe and the UK amid easing inflationary pressures. If you look at the valuation of the S&P 500, the risk/reward ratio for bonds is currently looking better. 

Again, I have Joe Biden as the cover photo, on the front page.
Because his speech yesterday was exceptionally good; could also have been from the predecessor Donald J. Trump!
So America is back, at least as far as foreign policy in relation to Ukraine is concerned; because he made it clear that it was a mistake to use military means to support Russian compatriots in a neighboring sovereign state. Which I absolutely agree with! Because if Putin had ensured with Zelensky, yes even with us, the so-called West, that there would have been free elections in the 4 regions, and/or Crimea, then this war would never have broken out! Like, for example, in relation to Brexit – and or Catalonia. No, Putin chose military means – and that has the effect of a political earthquake here in the West. Because we all assumed that this time is over. And that`s why the West should try to convince the two political Asian giants, India & China, with us, i.e. the so-called West (i.e. Europe, the USA, and other Anglo-Saxon states), to speak in ine political language tigether about the war in Ukraine! To (un)consciously (un)wantedly keep belligerent fellow human beings from an even worse course of the war. Because that Ukraine is allowed to defend its sovereign state borders; Indian politicians understand that too, let alone Chinese ones! But I’m not a trained politician, so now the focus on the Price Action. And it was really, really volatile today; in all asset classes. Because the future in Ukraine looks more uncertain than before. Inflation is also not falling as fast as expected. And the central banks are likely to turn interest rates longer than previously thought. That`s how i understood the sell-off in the New York stock market today. Because now you can get interest in Chicago, for the next 6 months and/or 2 years, round aboout 4 percent – and that without risk…

Forex 10Y Government Bonds Stock Markets

Canadian Dollar Depreciates after Inflation Data Italian 10-Year BTP Yield Rises to 7-Week High Asian Stocks Mostly Fall on Rate Hike Fears
Euro Nears 1-1/2-Month Low JGB 10-Year Yield Tops BOJ Policy Ceiling FTSE 100 Pulls Back from Record High
European Stocks Fall on Tuesday
Wall Street Starts Week on Sour NoteForex
Canadian Dollar Depreciates after Inflation Data
Euro Nears 1-1/2-Month Low

Canadian Dollar Depreciates after Inflation Data
The Canadian dollar weakened to approach $1.35, the lowest level since January 5th, after the inflation rate in the country slowed more than expected in January. Annual inflation fell to 5.9%, the lowest in near a year and below forecasts of 6.1% and the core rate unexpectedly eased to 5%.

Euro Nears 1-1/2-Month Low
The euro held below $1.07, hovering around its weakest level since January 6th, as investors rushed for the dollar amid expectations that the Federal Reserve would stick to its hawkish monetary policy for longer following the release of strong US labor data and hotter-than-expected inflation. Meanwhile, Friday’s core PCE price index could offer further cues on the tightening cycle path.

10Y Government Bonds
Italian 10-Year BTP Yield Rises to 7-Week High
JGB 10-Year Yield Tops BOJ Policy Ceiling

Canadian 10-Year Bond Yield Rises to 3-Month High
The yield on Canada’s 10-year government bond rose past the 3.35% mark in February, tracking the rise for global bond yields to a three-month high as strong economic data and hawkish signals by Fed officials ramped up expectations of higher interest rates for longer by the US central bank. Domestically, the Canadian inflation rate fell to 5.9% in January, the lowest in 11 months, and below market expectations of 6.1%.

Italian 10-Year BTP Yield Rises to 7-Week High
The yield on the Italian 10-year BTP rose to 4.4% in late February, the highest in seven weeks, as expectations of persistent interest rate increases by the European Central Bank extended their pressure on European debt prices. The ECB has already signaled another 50bps hike at its March meeting.Stock Markets
Asian Stocks Mostly Fall on Rate Hike Fears
FTSE 100 Pulls Back from Record High
European Stocks Fall on Tuesday
Wall Street Starts Week on Sour Note

Asian Stocks Mostly Fall on Rate Hike Fears
Asian equity markets mostly fell on Tuesday as concerns that central banks will have to raise interest rates further to tame inflation reverberated through markets. Investors also digested data showing manufacturing activity in Australia improved slightly in February, while that in Japan contracted at the steepest pace since August 2020. Shares in Australia, Japan, and Hong Kong declined, while mainland China stocks gained amid improving economic and corporate outlooks.

FTSE 100 Pulls Back from Record High
Equities in London came under pressure on Tuesday, with the benchmark FTSE 100 pulling back from record levels to end below 8,000 points, dragged by heavyweight materials and energy stocks. Investors remained cautious about the prospect of further central bank policy tightening to tame inflation, raising the risk of a recession. 

European Stocks Fall on Tuesday
European equity markets fell on Tuesday, with the benchmark Stoxx 600 down 0.2% led by tech, auto and basic resources stocks while banks moved higher. Among single stocks, Credit Suisse tumbled more than 3% on news about financial regulator Finma reviewing the validity of the company’s chairman’s statement about outflows.

Wall Street Starts Week on Sour Note
The Dow closed almost 700 points lower on Tuesday, and the S&P 500 and Nasdaq 100 slipped 2% and 2.5%, respectively. Investors were worried after Treasury yields surged to their highest level since November and disappointing forecasts from heavyweight retailers added to concerns that inflation and higher interest rates have started hurting the purchasing power of US consumers. On the corporate news, Home Depot fell more than 7% after the home improvement retailer missed quarterly revenue estimates and offered weak guidance. Walmart also came into the spotlight after the retail bellwether struck a cautious note in its economic outlook for 2023. On top of that, better-than-expected PMI data supported the case for further central bank policy tightening, driving Treasury yields higher while punishing tech and other growth stocks. Rising geopolitical tensions, particularly between the world’s two superpowers, US and China, also discouraged investors from turning bullish.DEVISE 2 DAY 48h
– Where I Was Wrong, Where I Was Right

The week after!
This could be the title for this week after the US inflation figures turned out worse, i.e. higher, than expected. US Inflation Fall Losing Momentum! And if things continue like this, then we are threatened with an increase again compared to the previous year, om March 2020? But I don’t want to play Kassdandra; which also doesn’t work because I have another genitalia between my legs 😉 but that’s just by the way! Because the US yield curve is becoming more attractive to all of us, which is putting pressure on the US WallStreet. That`s why, I`m staying away from a new 4XSetUp again for the time being in relation to the DOW Future.

However,
we remain long in EURUSD, long in the DAX Future, and or also (since the beginning of last week) now long in the ADIDAS share & BITCOIN.

I still don’t dare to formulate a new 4XSetUp in UKOIL (CFD on the Brent Crude Oil Future)! Andthat although meanwhile Brent Steadies as Traders Reassess Outlook Brent crude futures steadied above $83 per barrel on Tuesday as traders weighed optimism over China’s demand recovery against concerns about rising US crude supplies and further central bank policy tightening. In the latest sign of China’s rebounding energy demand, Russian exports of discounted crude and fuel oil to the world’s top crude importer jumped to record levels in January. The IEA and OPEC also raised their forecast for 2023 oil demand growth, citing higher consumption from China.