The financial markets – what’s occurring
It is all about the WAR!!!!
MARKETS ARE MOVING BASED ON HEADLINES- SANCTIONS, BLOW BY BLOW UPDATES ON FIGHTING (LAND TAKEN AND LOST).
FEAR OF LONGTERM INSTABILITY PUSHING INDICES LOWER, HOPE OF RESOLUTION AND CONTAINMENT MOVING THEM HIGHER.
ALL THE ECONOMIC, TECHNICAL ANALYSIS WE DO HERE IS IRRELEVANT.
Does the conflict increase the chances of Inflation? Yes – supply issues, sanctions, slow down in economic activity as consumers confidence is reined in, all point towards Stagflation.
They are “behind the curve”. Can they Increase rates with Global tensions this high? They should but may not. Fed Speaker after speaker has hinted at wanting higher rates, in the March meeting. 16 March is the date of their next Monetary Policy announcement.
They need to do something about Inflation and the Bubbles they have created in Property, Financial Assets, Goods, and services as result of amazingly loose Monetary policy.
Yields on the 10-year have fallen as Investors seek safety in US government (considered risk free) bonds.
Gold rallied and broke out of its range. Gold is a hedge against Inflation and the safest of safe havens.
Talk that Russia has a lot of its investments in Gold and may need to sell their gold to finance the War as other sources of funding are cut off, is premature at the moment.
Economic news due – none of it is relevant at the moment
Powell speaking to Congress on Wednesday may be the most market moving.
For the record US PMIs on Tuesday and Non farm Payrolls on Friday
Markets are going lower because the valautions of tech were exaggerated due to- too much money in the system(money flows around stock markets like water), competion for funds from higher returns from safe investments like US treasurys and proft taking.
And the fear that war will escalate
Its usefulness is doubtful in these troubled times.
My Chart Guy was spot on again last week.
This is his view for the week ahead.
Pullback. As long as 4260-80 hold, 4450 is up next. Lift off point to 4700. 4260 fails=new lows
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Colin 01-6644034 0851722729