2022/09/19 (072) Column

„Bank Stocks
In An Environment Of Rising
Interest Rates Should At Least Be On Our Watchlist“


Bank Stocks In An Environment Of Rising Interest Rates Should At Least Be On Our Watchlist

For Simon Peters, an investment strategist at Algebris Investments, the outlook for the banks is seldom as good. “The financial sector is one of the few sectors to benefit from higher interest rates. Bank margins rise when interest rates rise, so that we see price potential of 50 to 100 percent for many financial stocks worldwide. Another possibility could be subordinated bonds from investment-grade issuers: they’re currently yielding close to 8%,” he said. I won`t and/or can`t arguing against it competently. All I can argue is, in my own words, that inflation, in our so-called West, is at its highest level in four decades, and our central bankers, as well as politicians, who since the Lehman Brothers disaster in 2008, only knewed how to help themselves in other ways than to operate with an expansive, dovish monetary policy and/or fiscal policy. And certainly will not again, not for longer, will surely not continue to act as they have during the last almost 15 years.

Higher interest rates don’t just mean a more expensive yield curve. No, they also mean higher profit margins for banks. Which you sooner and/or later, more and/or less, also pass on to private companies and/or private individuals. Which helps to fundamentally strengthen each individual currency. Admittedly, this is putting pressure on stocks of non-profitable companies on US WallStreet. But I’m not fundamentally negative about it. If you don’t make politics for US WallStreet your top priority. But rather for the majority of US Americans; i.e. taxpayers and/or consumers. Because that’s all US Americans – regardless of US WallStreet. Therefore, the center of every society, the majority of society, can only be organized peacefully with the help of a real interest rate. So that money can buy more than a year ago! As under Donald Trump – and his foreign policy peace policy. And surplus organized energy policies; for the first time in 40 years! Quite the opposite of Sleepy Joe’s US Democrats. They actually managed to push up US inflation in the last two years. Because of green social-democratic political fantasies of nonpotence, under the cloak of a liberal democracy.

I’ve been on Wall Street, on the economy, for almost a quarter of a century now.
And that as a non-academic who has not only read all the knowledge himself. But also in many companies had to earn his money at times as a waiter, as a salesman, as a temptation specialist, in a call center, and/or much more jobs. Because all brokers had only ever offered me as a volunteer worker. Because I didn’t have an academic reference to show. Independently of my private voluntary experience at a few online brokers, which I would like to extend a warm welcome to, it should be noted that during a severe recession the profits of most banks in the USA and Europe drop by 10 to 20 percent. However, the far positive effects of interest rate increases are not taken into account by most analysts. You don’t need an academic title for this; although most of the time it does no harm. My previous experience is sufficient for this, without an academic title. Because the recession seems to be fully priced in at the moment in the financial sector, both in the stock and/or bond markets, here in our so-called West. Only the (un)consciously (un)intentionally organized high inflation, due to expansive monetary policy, of our political class, is a problem for our economies. A problem for us taxpayers and/or consumers, who we all are. And is a big one! So you don’t need an academic title, let alone work in a bank to realize this. Profitable computing is perfectly sufficient. Even if our colleagues figure something else out for us. Hold word; word on it! Because higher interest rates are better as their reputation! So that basically offers us market guys considerable opportunities in relation to individual bank stocks. But which are they?
That i will try to formulate in one of the upcoming financial market 4XSetUps…

DEVISE 2 DAY 48h – Price Action News

Euro Closes Week Marginally Above Parity
The euro strengthened slightly, rebounding back to the parity level with the US dollar as hawkish expectationsfor the ECB supported the bloc’s currency while the greenback’s rally momentarily paused. ECB Vice-President de Guindos said that the central bank does not expect the slowdown in the European economy to bring down inflation by itself, emphasizing that interest rates must continue to rise to keep inflation expectations anchored and avoid second round effects. The ECB raised interest rates by an unprecedented 75 bps in its last decision and signaled further hikes in next meetings. Additionally, the central bank revised its GDP growth estimates lower for the coming years, but steered clear of suggesting that a contraction may take place.

European Shares Book Nearly 3% Weekly Loss
European equity markets extended losses on Friday, with the benchmark Stoxx 600 losing more than 1% and contracting nearly 3% this week, as recession concerns and hawkish comments from several ECB policymakers weighed on investors’ mood. Late on Thursday, the World Bank said the world may be edging toward a recession in 2023 as central banks around the world hike interest rates in response to high inflation. At the same time, the energy crisis is far from over and governments in Europe brace for the possibility of energy rationing. The DAX shed 2.7% on the week and lost more than 1.5% only on Friday.

Wall Street Extends Selloff
The Dow lost over 200 points on Friday, while the S&P 500 and the Nasdaq lost 0.9% each as FedEx ugly earnings warning reaffirmed investors’ fears about the gloomy global growth outlook. At the same time, prospects of an even more aggressive tightening policy further dented sentiment. FedEx plunged more than 20% after the logistics giant withdrew its full-year guidance while missing earnings estimates as the outlook for the global economy significantly worsened. All three benchmarks are on track to notch their fourth losing week in five. The Dow Jones has plunged 4.5% this week, while the S&P 500 is 4.8% lower. The Nasdaq is down over 6%.

China Stocks Sink Despite Strong Data
Shanghai Composite fell 2.3% like Shenzhen Component too on their lowest levels in 16 weeks, as weak sentiment towards mainland stocks overshadowed better-than-expected Chinese economic numbers.DEVISE 2 DAY Another 48 Hours – Where I Was Wrong, Whre I Was Right

On Monday we closed our 5 open 4XSetUps with a lost. Like our MSFT long trading capability (from 03/07/2022) with a lost of 41.26 $ (last price 244.74 $ as we went long at 285 $) at once. Our GBPJPY long trading capability (from last monday 09/12/2022) with a lost of 2.04 GBPJPY (last price 163.21 GBPJPY as we went long at 165.25 GBPJPY). Our VOW3 long trading capability (from last tuesday 09/13/2022) with a lost of 6.54 € (last price 145.46 € as we went long at 152.00 €). Like our LVMH long trading capability (from last wednesday 09/14/2022) with a lost of 12.4 € (last price 637.5 € as we went long at 649.9 €). And/Or last but not least also our GS long trading capability (from last thursday 09/15/2022) with a lost of 1.05 $ (last price 326.21 $ as we went long at 327.26 $). So we`re only long in the YM1!, in the DXY and/or short in the UKOIL this week. But in these two open trading capabilities at least with still an existing booking profit currently.

However, this week’s focus is on the Fed meeting. And or that of the BOE after it was moved due to the death of Queen Elizabeth. Therefore, I focus daily on the YM1! in the Technical Analysis 4XSetUps. Also in DXY and/or UKOIL if something extraordinary happens. But the fight about 30.000 in YM1! has top top priority…