2023/02/14 (170) Column

A bad year for the economy,
but also a good one for the stock markets!
Will it be like this in 2023?


Inflation more and/or less already peaked in the summer of 2022 in the US. We shouldn’t experience a greater panic anymore, precisely because of the new inflation rate coming out even higher. So that we can now assume that the emotional low point, the panic, is already behind us! But what happens next?

The real estate market is likely to cool down worldwide.
Higher interest rates and construction costs usually mean that fewer people buy their own homes.
Fewer real estate purchases then also result in fewer purchases of furniture and large electrical appliances.
This means that important sectors for consumption are weaker, so that falling demand should more and/or lesse dampen inflation. And since Europe is now well prepared for the energy crisis due to full gas storage facilities, we here in the eurozone, especially in my home country Germany, are only likely to get into trouble if there is a severe cold snap in February 2023. So that an improving economy in China in 2023 should also increase the supply of goods worldwide, which should also have a braking effect on inflation rates. As supply increases. And in the best of all worlds, commodity prices will also fall again, as an impending end to the war in Ukraine would be more bearish on price action than renewed demand from a resurgent, growing China.

The stock markets are more and/or less at the same level as in summer 2022.
But this time only from the southwest to the northeast – and not from the northwest to the southeast.
And so, with fewer inflation worries, I see a better 2023 for US equities on Wall Street. Vice Versa a lower DXY and/or a cheaper US Yield Curve. Although in our so-called West, probably because of multiple slight recessions, the return to old new all-time highs in the various national stock markets is unlikely to happen in 2023, emerging countries have a lot of potential. For example, JP Morgan names Taiwan, Brazil and South Africa as promising investment options.
DEVISE 2 DAY 48h
– Last News About What Drives The News Media

Discussion about fighter jets
Extremely high losses at the Russians

According to the Russian mercenary group Wagner, the fighting for the city of Bakhmut in eastern Ukraine is far from over. “Bachmut will not be taken tomorrow because there is strong resistance,” said Wagner boss Yevgeny Prigozhin on Tuesday, according to his press service. There will be no victory celebrations in the foreseeable future. Ukraine is becoming “more & more active” and is mobilizing more forces. „Every day, between 300 and 500 new fighters from all directions approached the city, which had been bitterly fought over for months,” said the Wagner boss. The artillery fire is getting “more intense every day”. Both sides suffered heavy casualties in the fierce fighting for Bakhmut. Located in the mining region, the city has become an important political and symbolic destination. Moscow is pursuing the goal of bringing the Donetsk region under complete control. For several months, the Russian armed forces and Wagner mercenaries have been trying to capture Bakhmut.

Kyiv on Monday acknowledged a “difficult” situation north of Bakhmut in the village of Paraskovijivka, saying it was “under intense fire and attacks.” On the same day, the Russian Defense Ministry announced that its forces had captured Paraskoviyevka’s neighboring village of Krasna Gora. According to Prigozhin, “heavy fighting” continues in the north. There are “no signs that Ukraine will give up Bakhmut,” said the head of the pro-Russian separatists in Donetsk, Denis Puschilin, on Tuesday, according to Russian news agencies. “We are aware that there is currently no prospect of the enemy giving up their positions without a fight,” Puschilin said. Pushilin said last week that Russian forces had cut off three out of four Ukrainian supply routes to Bakhmut.

Of the approximately 70,000 residents of the city, “around 5,000” are still on site, Ukrainian army spokesman Serhiy Cherevaty said on Ukrainian television on Tuesday. According to Ukrainian authorities, access for civilians, including members of aid organizations and journalists, has been restricted. “We are now taking additional steps to evacuate everyone who remained in Bakhmut,” Donetsk Region Governor Pavlo Kirilenko said on Ukrainian television. According to him, both the front and the towns in the rear are under “constant fire.” The situation is “difficult but under control”.Even if I am not a warmonger,
we should support Ukraine politically.
Because the Russian President Putin has militarily attacked a sovereign country. And that also means that we should supply Ukraine with military weapons if we can; in case they need some.

By we, in this case, I mean the so-called West.
Because if we don’t do that, under the watch of the current us president Sleepy Joe Biden, everyone on this planet will and/or can also understand that as a failure to help! Or? Excuse me for my astute words…
DEVISE 2 DAY Another 48h
– Last News About How Drives The Price Action

As expected, January consumer prices are slightly ahead of Wall Street targets. Month-to-month and yoy we were 0.5% and 6.4% vs targets of 0.4% and 6.2%. Excluding food and energy, the rates were 0.4% and 5.6% vs the targeted 0.3% and 5.5%. The market reaction was initially positive, although the rally does not appear to be sustained. Apart from the inflation data, numerous central bankers will have their say during the course of the day. Speakers include Barkin, Logan, Harker and Williams. As far as the stock market is concerned, we’ve seen consistent solid results from Corporate America for the past few days. Since last night’s close, Arista Networks, Avis Budget, Cadence, Coca-Cola, Global Foundries, Marriott International, Palantir and Zoetis have all beaten estimates. In most cases, the prospects are also raised. After closing, Airbnb, Akamai, Devon Energy and TripAdvisor will report quarterly results.Forex 10-Year Government Bond Yields Stock Markets

Dollar Steady Near One-Month High US 10-Year Yield Slightly Down After CPI Report Asian Stocks Mostly Advance
Euro Approaches $1.08 German Bund Yield Remains Close to Over 1-Month High European Stocks Close Slightly Higher
India 10-Year Government Bond Yield Continues to Rise FTSE 100 Notches Fresh Record High
US Stocks Fall in Volatile Trading

Forex
Dollar Steady Near One-Month High
Euro Approaches $1.08

Dollar Steady Near One-Month High
The dollar index traded around 103.5 on Tuesday, hovering close to levels not seen since early January, with hotter-than-expected US inflation dashing hopes that the Federal Reserve will soon end its tightening campaign. The annual inflation rate in the US slowed only slightly to 6.4% in January from 6.5% in December, less than market forecasts of 6.2%, suggesting that getting inflation under control will take more time than expected. At the same time, a chorus of Fed officials reaffirmed their commitment to bring down inflation with more rate increases. The most pronounced selling activity was against the euro and the British pound. On the flip side, the dollar appreciated against the Japanese yen following the surprise nomination of Kazuo Ueda as the next Bank of Japan governor.

Euro Approaches $1.08
The Euro strengthened to approach $1.08 in the second half of February, but remained below nine-month highs of $1.1 touched on February 1st, as investors continue to bet on a longer period of high interest rates and adjust their positions accordingly. The ECB is expected to raise key policy rates by another 50bps in March and to deliver a 25bps increase after that. The deposit rate is currently at 2.5%, but the peak rate is seen at 3.25%. Meanwhile, traders start betting interest rates in the US will need to stay high for a longer period of time. The Federal Reserve is seen delivering at least two more rate hikes. The peak rate is expected slightly higher at 5.00%-5.25% and no cuts in borrowing costs are expected this year.

10-Year Government Bond Yields
US 10-Year Yield Slightly Down After CPI Report
German Bund Yield Remains Close to Over 1-Month High
India 10-Year Government Bond Yield Continues to Rise

US 10-Year Yield Slightly Down After CPI Report
The yield on the US 10-year Treasury note, seen as a proxy for global borrowing costs, was slightly down at 3.69% on Tuesday, reversing an initial jump that sent the yield to above 3.7%, as investors assessed the latest CPI report out of the US. Inflation in the world’s largest economy eased to 6.4% in January, the lowest since October 2021, but slightly above market expectations of 6.2%, suggesting US policymakers will continue to raise rates to combat inflation. Last week, Fed Chair Jerome Powell acknowledged that rates may need to move higher than expected if the US economic strength threatens the Fed’s progress in lowering inflation.

German Bund Yield Remains Close to Over 1-Month High
Germany’s 10-year government bond yield held above 2.35% in mid-February, remaining close to Friday’s over one-month high of 2.396%, as remarks by hawkish European Central Bank officials dashed hopes of a quick end to the current tightening cycle. ECB’s Joachim Nagel joined last week a chorus of policymakers calling for more interest rate increases, saying the ECB must act decisively to prevent inflation expectations from rising far above its 2% target, while board member Isabel Schnabel said that the rate hikes delivered by the ECB so far were having little impact on inflation. The ECB has raised its key rates by 50bps to the highest level since 2008, and signaled another similar hike in March to extend its efforts against soaring inflation in the bloc. Meanwhile, European Commission forecasts showed Eurozone economic growth is likely to be stronger than expected this year while inflation will be lower than in forecasts made towards the end of 2022.India 10-Year Government Bond Yield Continues to Rise
The yield on the Indian 10-year government bond rose to 7.36%, the highest in February so far, after inflation in India accelerated more than expected in January while the Reserve Bank of India raised interest rates by the expected 25bps to 6.5% and maintained a hawkish stance leaving the door open for further increases. Market participants had mostly bet on a final borrowing costs hike in the current tightening cycle. The central bank also kept its stance unchanged on the withdrawal of accommodation and said it would allow banks to borrow and lend government bonds to increase liquidity in the market. Early in the month, the government presented its Union Budget for the 2023-24 financial year, setting borrowing at INR 15.43 trillion, below broad estimates of INR 16 trillion.

Stock Markets
Asian Stocks Mostly Advance
European Stocks Close Slightly Higher
FTSE 100 Notches Fresh Record High
US Stocks Fall in Volatile Trading

Asian Stocks Mostly Advance
Asian equity markets mostly rose on Tuesday, tracking Wall Street higher as investors brace for US inflation data which is expected to show that price pressures abated further in January. Investors also assessed data showing Japan’s economy rebounded less than expected in the fourth quarter, while awaiting the Japanese government’s nomination for the next Bank of Japan governor. In Australia, February consumer confidence fell sharply to be back near historic lows due to persistent cost of living pressures and rising interest rates, while business confidence turned positive in January. Shares in Australia, Japan and South Korea advanced, while Hong Kong and mainland China stocks fluctuated around the flatline.

European Stocks Close Slightly Higher
European equity markets closed marginally higher on Tuesday, with the benchamrk Stoxx 600 and the German DAX up 0.3% each, as investors assessed the latest US inflation print and mixed corporate results. Holiday group TUI reported more bookings and higher Q1 revenue while German conglomerate Thyssenkrupp tumbled more than 10% after saying its quarterly operating profit dropped by a third. Meanwhile, Norwegian aluminum producer Norsk Hydro posted a bigger-than-expected fall in Q4 core profit. On the data front, the US inflation rate eased less than expected in January, suggesting it will take some time before the rate moves back to the Fed’s 2% target. Germany’s wholesale price inflation also fell in January to 10.6%, while the latest UK jobs report showed pay growth excluding bonuses accelerated to an all-time high in Q4.

FTSE 100 Notches Fresh Record High
Equities in London extended gains for a second consecutive session on Tuesday, with the benchmark FTSE 100 closing at a fresh record peak of 7,950 points, driven by the technology sector. The UK’s unemployment rate remained at 3.7%, but figures showing the sharpest wage growth outside the pandemic also fuelled worries that Bank of England interest rates will need to keep rising to cool an overheating economy. On the corporate side, Coca-Cola HBC rallied almost 5% to lead the FTSE 100 after the bottler beat profit forecasts and saw sales surge against a challenging economic backdrop. Vodafone Group was also among the top gainers, up nearly 3.5%, after Liberty Global said it had acquired a stake in the rival telecom group.

US Stocks Fall in Volatile Trading
The Dow Jones lost more than 200 points on Tuesday, while the S&P 500 and Nasdaq 100 were down 0.5% and 0.3%, respectively, as investors digested the latest US inflation data while reassessing the outlook for monetary policy. This wave of volatility in equity markets came after the closely watched US CPI reading for January landed at 6.4%, the lowest since October 2021, still above economists’ forecast of 6.2%. The report came on the heels of a blockbuster US jobs report earlier this month, suggesting that getting inflation under control will take more time than expected. On the policy side, Dallas Fed President Lorie Logan and Richmond Fed President Thomas Barkin were among the latest policymakers to warn that the US central bank will need to keep gradually raising interest rates to tame inflation. On the earnings front, Coca-Cola reported quarterly revenue that topped forecasts.DEVISE 2 DAY 48h
– Where I Was Wrong, Where I Was Right

After TESLA stock traded at $202 last week; and we have once again reached our price target, I tried to argue a little more cautiously this week! But the data today was so dissapered, that i`m closing our long DOW Future. Because my hole exceptations and/ir even 4XSetUps were based on the imagination, that the US Inflation will come down in the form of a bell curve, like the us unemplyment rate whil the corona virus outbreak 2020. But these expectations were destroyed today, at least for me! Why do I pull the ripcord! In order to be able to draw at least a few more points from this 4XSetUp. Volatile price action is likely ahead until the upcoming figures in March. Nevertheless, we remain long in our remaining open positions this week: long 4XSetUps in EURUSD, long in DAX Future, and/or long in ADIDAS share % BUTCOIN (since monday, this week). In addition. Even if I am not a friend of cryptos – quite the opposite! But I don’t write my DEVISE 2 DAY Affiliate Financial Market Online Newspaper for me, but much much for you.

In addition, I am still undecided to formulate a new further 4XSetUp via UKOIL, i.e. a CFD on the Brent future. And this despite the fact that the price action today was negativ. Because Brent crude futures fell almost 2% to around $85 per barrel on Tuesday, retreating from an almost three-week peak of $87 touched in the previous session, after the US government announced plans to release 26 million barrels of oil from strategic reserves, countering the impact of Russian output cuts. Supply worries also eased after the EIA said it expected record March production from the seven largest US shale basins