Stocks News: Latest Market News

On March 8^th we closed our European Banks holding position because of the negative news regarding bankruptcy of SVB Bank and the bad news sentiment regarding the financial sector. With 26% profit it’s not as bad, but our decision was related also to some other factors that affected the financial sector, which we’re going to describe next in this article.

The SVB Financial Group (SIVB) fallout is creating a mini credit crunch, with the banks stocks dropping aggressively. However, the SVB fallout reveals that banks are in trouble again. We don’t think this is even close to the 2008-type financial crisis because SIVB it’s not a major player in the arena. SIVB it’s a bank that used to fund IT&C projects with an easy credit policy. The fallout of SVB Financial Group (SIVB) is close related with rising interest rate from FED because many IT&C companies can’t pay the debt.

Our selling order it’s not related only to SIVB bankruptcy, other catalyst will also affect the financial sector.

The starting point to understand the current banks' troubles is the Fed's massive liquidity injection during in response to COVID. The Fed injected $4.7 trillion into the financial system from 2020 to 2022 via asset purchases or QE. Instead of making the loans, commercial banks bought the safest assets - Treasury Bonds.

You can read more here https://www.stlouisfed.org/on-the-economy/2022/january/have-fed-asset-purchases-reshaped-bank-balance-sheets-part-1 about banks reaction to Fed capital injection.

Some of the bonds are held to maturity (and any capital gain/loss is not included on the income statement) by banks and other bonds are available for sale. Banks significantly increased their purchases of the Treasury bonds as the Fed expanded the money supply.

For the securities available for sale, the realized capital gain/loss is recorded into balance sheet but banks must sale them to raise capital. These securities available for sales have huge unrealized loss in 2022, because the bond prices fell and interest rates increased.

Most important two things will affect banks performance

Deposit Withdrawals. It’s another major concern for banks because, from December 2022, deposits started to decline with a 2.5% rate, largest percent from 1970. Clients are closing deposits at these huge rates because they need to cover the cost of living which is affected by inflation. This trend will accelerate as the Fed continues to increase short term interest rates. When deposit will deplete, banks will face huge losses because they need to sell securities with huge losses. Other scenario is that the banks might have to increase the interest rates on savings accounts which would affect the overall profitability.

Bad Loans will be also a major reason to worry. Given the huge rate increase on car loans, mortgages and commercial loans, it’s reasonable to have an increase in the defaults. This scenario it’s the 1929 great depression and it’s interesting how the Fed will face this. The Fed can simply lower the interest rates and push the bond prices higher but also the Fed it’s forced to fight inflation until reaches 2% to keep the monetary policy tight.

We recommend to close positions into financial sector and to invest into Gold until market sentiment will improve. Gold was one of the very few bright spots in a dismal 2022, ending the year essentially flat, and I expect its performance to remain strong in the year ahead. We have record retail demand (check here https://www.gold.org/goldhub/research/gold-demand-trends/gold-demand-trends-full-year-2022) and demand for Gold ETF it’s at highest level.

We are headed into a recession because:

• Money supply is falling. There is an old school monetary theory that asserts a decline in the money supply actually causes a recession (GDP=M2 x Velocity).
• The yield curve is inverted and the 10-year interest rate minus the 2-year interest rate is a negative 0.81%.
• Consumer Sentiment Is rising, but remains very low.
• Unemployment rate is starting to increase before recessions.

In the next article we will discuss how to hedge against macro-economic downturn that we are awaiting and why Gold it’s the best instrument.

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Nonfarm payroll jobs rose by 517,000 that  is much higher than expected, DXY is up with over 1% also VIX and SP500 are lower with 1%. Previous month was revised higher with 72000 new jobs and that was an important factor for this evolution. The 600,000 job gains is remarkable especially given all the job cut announcements from the IT sector. That’s the biggest one-month job gain since February 2022. The gains were led in leisure and hospitality with 128,000 new jobs in the current month. Unemployment is just below pre-Covid19 levels. The work week jumped to 34.7 from 34.4, matching the highest since December 2021.

That said we will have a stronger dollar in this quarter, instead of one more hike from FED, higher for longer for FED is in itself a continued form of QT (monetary tightening). I’m impressed how stock markets ignore this signal, Also productivity literally plunged in January because many parts of the economy are contracting (housing & manufacturing). Future Q1 GDP will most likely be negative and profit margins will continue to contract. AMZN APPLE & MSFT have one of the worst earning results; this trend will continue with other stocks.

We think these prices are good to close some winning positions

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Trading is one of the most difficult jobs ever because you need to constantly adapt to unforeseeable external factors that affect your initial judgement without emotional attachment and it’s also the only job where you can lose money while working.

The year 2022 taught us an invaluable lesson: “invest while adopting an active portfolio management”. Old school investing rules like “Buy & Hold forever” or “Mix portfolio with 60% Stocks & 40% Bonds” are now deprecated and who followed them has now an insurmountable lose that will take years to recover to its initial values. I’m advocating to allocate the assets to certain economic sectors that will work in the near future.

This year was the case of Energy, Commodities & Consumer samples sectors, also REITs in the first half of the year. In the last two years, the investors had switched from Growth to Value & Dividend Stocks.

Our main target is to outperform the best funds that have a 60% to 80% allocation of assets in Stocks and, if it’s possible, the S&P500.

These funds are:

• FBALX Fidelity® Balanced Fund with 29.5% decline in unit fund year to date
• VBIAX Vanguard Balanced Index Fund with 18.3% decline in unit fund year to date
• FFFEX Fidelity Freedom® 2030 Fund with 22.3% decline in unit fund year to date
• VWELX Vanguard Wellington™ Fund with 20% decline in unit fund year to date
• RBAIX T. Rowe Price Balanced Fund with 19% decline in unit fund year to date

The funds above are the best US funds according to Money US News.

Instead of negative -1,8% yield performance, our balanced portfolio is outperforming the S&P and the funds mentioned above, also is well positioned if the market recovers, and also has an active hedge against future market drops. Just take a look on the Performance & Allocation Graphs below, screen captures from our broker IBKR (Interactive Broker) account.

On the graph, Others (orange) are funds in Precious Metals and Commodity.

Two major macroeconomic triggers forced us to adapt our investing strategy this year: the global energy crisis due to the Ukraine – Russia War and the Fed aggressive interest rate hiking followed by other Central Banks. We maintain a strong 💪 position into Precious Metals and Commodities Stocks & Funds but we are ready to adapt if the Fed changes its policy. The buy & hold strategy worked two decades ago until now because of the ultra-low Fed policy and the cheap money.

What to expect from 2023 Markets

2023 is going to be a challenging year and will require a solid analysis, a fast adaptive strategy, and a lot of patience. Volatility will grow and we will have lots of ups & downs in all market sectors. Investing in risky assets during such times is not pleasant.

1) Stock Market Evolution in 2023

It’s difficult to say how stock market will evolve in the next year because we have positive and also negatives factors that both can influence markets in 2023.

Because I’m a positive person, I will start with the positive catalysts:

• The November CPI index finally signalled that will start to peak decline in inflation that the markets were so eagerly awaiting. The Fed, despite the rate rises in 2022, should sometime in the second quarter begin to set the exit point of their very aggressive monetary policy. The Fed raised rates to 4.5% in December, and the so-called famous "pivot," should come between 5% and 5.5%. That was the reason for the market recovery in December.
• Ending of the Ukraine – Russia War will have a positive effect on stock markets.
• China ending 0 Covid Policy announced by leader XI JINPING will have strong 💪 effects on international stock markets but most on the Asian Markets.
• Widespread decline in major asset classes.
• While maintained, the current net spending by the US Government will have a positive effect (EV Markets, Green Energy Act).
• Also, the Fed high rate will have a positive effect on the banking system socks.

On the other hand, the negative catalysts are in greater number:

• Corporate earnings are the main source of risk for stocks. We expect lower earnings because of the inflationary environment.
• Corporate Profit Margins will drop next year because right now we are at 👆 its highest levels. Corporate profit margins sit at their most elevated level in the last 70 years and this must be changed because consumers will stop spending sooner than later.
• Treasury yield curves remain deeply inverted worldwide and that is one of the most important indicators that bottom is not in the cards for 2023.
• Equity Exposure it’s still at highest level compared to previous recessions; we expect another 20% drawdown to have optimal level to enter the market.
• All Professional Economic Forecasters are pointing to recession into 2023:
  • Philadelphia Fed Survey of Professional Forecasters pointing 46.5 % to recession: https://www.philadelphiafed.org/surveys-and-data/real-time-data-research/spf-q4-2022
  • WSJ Economic Forecasting Survey - 65% of voters see recession: https://www.philadelphiafed.org/surveys-and-data/real-time-data-research/spf-q4-2022
  • Bloomberg Monthly Survey of Economists says 98% recession only 2% view a soft landing: https://www.bloomberg.com/news/articles/2022-11-23/fed-staff-saw-odds-of-us-recession-in-next-year-as-about-50-50?sref=38CcBIjZ&leadSource=uverify%20wall
  • Corporate Executives: Expectations of Recession are at the highest levels among KMPG Seniors and Bank of America Analysts
• Supply shortages and supply chain disruptions from government Covid-19 policies can’t be solved by the Fed and will have a real impact on inflation. These issues need more ⌚ time to be solved.

Successful investing is a marathon, not a sprint. I believe in a well-diversified portfolio in different sectors and we should also consider diversification within those sectors. I look for value, trends and under known/owned stocks; my advices to 2023 allocation of stocks are:

1. Value will continue to outperform Growth
2. Small caps will outperform large caps
3. Emerging Markets will outperform US markets
4. Precious metals & Commodities will outperform Stocks

2) Commodities Markets

Coal and Gas markets were poised with strong gains after a global energy crisis triggered by the Russia – Ukraine War, while tighter supplies expected in 2023 could fuel more gains. If Ukraine will win the war against Russia, and Russia will also lose the Crimea, then we have a smaller possibility that Russians will start to pump oil & gas again. This scenario has a low probability of approx. 10% and seems unlikely to happen because a change of the Russia regime is needed. Much more likely to happen is that we’ll have a frozen conflict with military advantage of the Ukrainian side and without a political regime change in Russia. From this point of view, we are positive on energy market with 60% of confidence. We don’t consider a larger percent of confidence because of the new China Covid-19 outbreak that will pose a serious threat to growth.

Our view is bolted by Goldman Sachs in their last memo:

"Despite the recent price declines, commodities will still likely finish the year as the best performing asset class. From a fundamental perspective, the setup for most commodities next year is more bullish than it has been at any point since we first highlighted the supercycle in October 2020."

Price of Food will soar because the invasion reduced supply from the key grain exporter Ukraine to a global market already driven higher by adverse weather and COVID-19 related restrictions. Corn and soybeans hit a decade high-prices climbed to an all-time record.

3) Precious Metals Markets

We are positive on gold markets because of the following factors:

• Further weakening of the dollar as inflation recedes its positive for Gold
• Geopolitical conflicts are also a good catalyst for Gold
• Economic growth in China, after two years and half of lockdown, next year will improve Gold
• Further weakening of the dollar as inflation recedes would provide support for Gold

You can read more in our previous articles https://topfxinvest.com/blog/markets-are-too-optimistic-about-the-fed-slow-pace-of-rate-hike

Silver will have also a very good evolution of price if the soft landing of markets and industrial sector will start to grow.

Gold & Silver are the ultimate ways to preserves value right now.

This article highlights our view for 2023 Market evolution and we want to wish you a profitable New Year in good health and working force.

For the year 2023 we plan to introduce a Stock Recommendation Service for investors and other facilities on our website.

To your success!
TopFxInvest Team

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The US dollar hit fresh lows during Powell's conference but reversed when he said that “the ultimate level of rates will be higher” than previously anticipated. That means the +5% rate is back on the table. The statement “We have a ways to go on rates” probably most important statement from speech  changed market sentiment, stocks shifted to downside and USD was higher in the day.

Below most important statements from Powell

• We're saying we will hike to a level that's sufficiently restrictive to tame inflation
• The ultimate top is 'very uncertain' but CPI and labor data suggests to me it will be higher than previously thought
• The time to slow the pace of hikes could be at the next meeting or the one after that. It will be discussed at the next meeting
• I don't think we've overtightened
• We had a discussion at this meeting about slowing rate hikes
• Long term inflation expectations have moved back down
• We don't have a lot of data on how quickly rate hikes hit an economy in a modern economy
• If we were to over-tighten, we could use our tools to support the economy
• It is very premature to think about pausing
• "We have a ways to go" on rates

Read all statement here.

Markets saw 50 basis points in December vs. 75. They could see the finish line for the tightening cycle after two Feed Meetings.

In conclusion inflation is not dead & employment remains strong that means we will not see a policy pivot point next two FED sessions. Negative for stocks positive for the Dollar

Read more about a pivot point.

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The Good

Stimulus and a looser monetary policy help China to have a solid COVID-19 recovery with moderate inflation, much lower than the European and US nations. China's interest rate is on a long-term downtrend, which could create attractive opportunities for fixed-income investors.

China markets have extremely low valuations, just think that Hang Seng lost more than 50% from all time high, and its price is similar with the 1997 levels.

Valuations are attractive and they are poised for a rebound if China’s growth recovers.

In a Twitter post, the hedge fund manager Michael Burry said:

“The Hang Seng recently hit 1997 levels. 25 years. Yet GDP multiplied 18 times during that time. 1997 valuations were 20 Earnings, 10x EV/Sales, 3x Tangible book. Now 7/1/1.”

Most of the global investors are underexposed to China, while China's communist party makes efforts to access foreign capital markets. The Chinese economy represents approximately 18% of the global GDP, but China A-share market only comprises 1% of the global MSCI index.

China’s economy is green energy-efficient oriented.

Efforts in seeking to achieve carbon neutrality and energy reform have the potential to create additional investment opportunities, given China's leading position in wind and solar components and materials. China is a global leader in the renewable power industry and has established a clear policy commitment in support of climate transition and the protection of natural capital.

China is on track to meet its 33% electricity consumption target from renewables by 2025 and could comfortably exceed it amid ongoing efforts to debottleneck the power grid to accommodate more renewables, analysts and clean energy project developers said.

https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/energy-transition/092322-china-could-exceed-renewables-generation-target-of-33-by-2025

The Ugly Part

97% of Chinese provinces are spending more than they are receiving back in tax revenue.

The Chinese real estate market is in collapse. Real Estate Market was a major source of revenue for government few years ago. Land sale revenues are down 29% relative to last year while roughly 7.1 billion square feet of housing has been sold this year, the lowest amount since 2015.

China Budget freefall. Just check below the chart of Budget balance in relation with GDP.

Regarding the consequences, companies are fined for nonsense and illusive reasons because the China government look for ways to create cash flow through taxes and fines at the civilian level.

A vegetable vendor was fined 66,000 (9538 Euro)Yuan for selling subpar celery.

Source:

http://global.chinadaily.com.cn/a/202208/30/WS630d561da310fd2b29e74de0.html

The Bad

Economic Growth for 2022 is revised down from 5.3% to 3.5%.

Taiwan Tensions with the US. War between Russia and Ukraine it’s catalyst for Chinese Communist party to invade Taiwan and that is a major concern for investors. Government bet that it will be difficult for US to economically sustain two fronts. Putin met with Xi Jinping multiple times before war with Ukraine. I personally don’t think China will invade Taiwan because the risk it’s simply too high for China.

Trade tensions & restrictions: The trade tensions and the tech war has expanded to semiconductors, as the US government imposed hard export restrictions on US chip technology.

Tech & Internet Collapse. All Chinese giant tech companies suffer from strong regulatory climate and difficult economically context.

Entrepreneurship and freedom of action for the technology market helped giants like Alibaba, Tencent or Baidu become what they are today, but last year’s climate was changed because of the US sanctions & government intervention.

Conclusion: Is China a buy?

Investment in China is very risky but is coming with huge opportunities, and we prefer small allocation of assets to Hang Seng and preferably just take high convictions stock like DQ (Daqo Energy).

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We think today that Fed and Mr. Powell will search sooner rather than later for a pivot point policy to change things because we already have a higher restrictive economic environment. We should remember that, when Fed suggested last time in 2018 that “future course of policy was predetermined on autopilot”, the stocks collapsed and Fed backtracked. Now they are trying right to introduce “data depending” on their speech, just check what they have said on Sept 30:

“Monetary policy will need to be restrictive for some time to have confidence that inflation is moving back to target. For these reasons, we are committed to avoiding pulling back prematurely. Fed will proceed in a data-dependent manner.”

Fed will keep hiking until something will break up. Just check the Bank of England (BOE) intervention because of illiquidity on gilt markets, also the Bank of Japan which have announced their first intervention to support Yen against a stronger Dollar. These interventions calmed down the market but nothing is done to solve the major fundamental issues.

Just check the chart below for Pound ADR (Average Daily Range) of 500 pips. This is not a common sense movement.

But when will we see an inflection point for Fed?!

It’s all about the last Jobs Report which shows that is much stronger than expected, with a 263,000 monthly job gain while the Unemployment Rate had a major drop to 3.5% versus a consensus forecast of 3.7%.

Average Hourly Earnings is at the lowest point since December 2021.  Stock market Futures are decreasing and bond yields are rising in the wake of a stronger than expected NFP. Inflation expectations have been on the retreat, but Mr. Powell still needs a lower job report next month to start change the monetary policy.

If we get a hot CPI tomorrow, while considering an improving job report in November, it could mean that we can’t expect a 125-bps worth of Fed hiking starting now, until the end of the year, but a 150-bps hike on December 2022. This scenario will be very bearish for S&P with another minimum of 300 points down from here.

If we will see a lower Job Report in November and December, therefore we could expect a stronger S&P from here.

Which Sectors Are Still Performing Better than S&P and What Are Our Exposure Today?

I don’t want to dig much further on this article.

We like the Energy Sector and we still have some good stocks like: CWEN, PIF, SU, VLO, TGA. Energy sector is the only branch on green this year. I think it’s too late to take new positions on energy right now, and if we see good news about the war in Ukraine, we will close some of our positions. Clean energy solutions will not solve this crisis, but it will be a part of the longer-term solution for improving the energy independence.

We have a great exposure on precious metals Silver & Gold, meaning 30% from our Portfolio. I’m still optimistic about Gold and I recommend to buy it after Fed will start changing its policy. Gold will be the first instrument that will start to grow. Gold registers a minus 8 percent year to date, but outperformed S&P with over 15 percent. We bought Gold between 1700 and 1800 and we expect a target price of 2000-2200 in the next year.

We are very bullish on Uranium, Lithium and Silicon because of EV market catalyst. We bought CYDVF (Cypress Development Corp), SQM (Sociedad Química y Minera de Chile S.A.), and bought again DQ (Daqo Energy).

The Financial sector it’s also one of our bets and will outperform S&P 500 because of the Rate Hike. Financial is in red year to date but emergent markets will outperform the US financial sector. We acquired Banco do Brasil (BDORY) because of a strong balance sheet and a good perspective on growth.

We have few opportunities to follow in a bear market and for us it’s an option to be exposed with 30% on cash until things will change from the FED side, maybe in the end of the first quarter next year it will be good time to acquire risk assets. What is your opinion regarding Stocks? Looking forward to hear your opinions in the comment section below.

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Energy sector it’s the best performing market sector in 2022 instead of the latest evolution of Oil. Evolution of energy sector its close correlated with war between Russia & Ukraine. But we need to recap last week’s events:

Russia shut down its Nord Stream 1 natural gas pipeline last week for “maintenance” and will thereby provide Europe with a preview of how will looks winter this year. Instead of opening terminal in Estonia from Norway and new delivery from Spain, or imports from Canada & Qatar Europe can’t replace completely Russian energy and Europeans will have higher bills for energy-related products. Its expected price caps but this will result in more shortage of Gas & Oil.

There is a growing possibility in the case of a regime change in Russia that could disrupt the crude oil and natural gas markets. We support this idea because of latest development of war, Ukrainian soldiers regain 6000 KM². Also, six of Putin’s allies have been shot or blown up, so Putin’s inner circle is becoming increasingly isolated. “Special operation” support is lowering because of Europe sanctions from 85% to 68% according to Levada.ru.

In the event that there is a ceasefire between Russia and Ukraine, post-Putin, the stock market could explode 40% to the upside. However, as long as Putin remains in power, the Ukrainian war is expected to persist in a long, and we will have high price of energy. We reduce our profitable positions this week in anticipation of pervious scenario.

After last days of Ukrainian Army advance we can see already a turning point of conflict. Just take a look of yesterday map:

We closed some energy positions like Alvopetro (Alvof) with +40% and Petroleo Brasil (PBA) +30% opened in March because we had important gains from price appreciation and large dividends, with higher risk of president Jair Bolsonaro intervention in companies’ administration.

We anticipate Corporate Earnings to decline except Energy. We remain skeptical that a new Iranian nuclear deal will be announced in the upcoming weeks because this will affect Bidden administration and relationship between USA and Israel.

What About US Inflation

U.S. inflation may have peaked, but at high levels thus forcing the Fed to remain restrictive. Strong dollar, high mortgage rates, lower commodity prices, lower demand, and reduced supply chain pressures are likely to help reduce inflation over the next year. The U.S. dollar should stabilize over the medium-term amid hawkishness from other central banks and slowing economic data this is positive for growth stocks in short term. Right now, CPI was published and is above expected values but market overreacted this bad news. Today’s CPI report wasn’t a game changer. A “better balance” in the labor market would be a game changer for CPI next months because higher vacancies-to-unemployment ratio fuels inflation.

Just read Societe Generale opinion below:

Societe Generale Research discusses the USD outlook and sees the currency rally close to its peak. "Aggressive fiscal reaction to higher energy prices encourages our belief that while the euro and pound won’t stage significant rallies until the we’re closer to the end of the energy crisis (and the end of the war in Ukraine), the dollar’s peak isn’t very far away," SocGen notes. "A period of EUR/USD and GBP/USD trading in low ranges is more likely than fresh 10% fall from here and it’s much more likely the next 10% move in USD/JPY is down, rather than up, too," SocGen adds.

We can see at the end of the year decline in USD and we acquired new positions on Gold, Silver and Banks European Index (EXX1), also new positions in Citi (C) Societe Generale Bank (GLE).

Right now, we have a late cycle development and we prefer equities instead of fixed income like bonds. Not all equities are good to own right now, we select just strong companies with large cash flow from sectors like Healthcare, Consumer Samples and Utilities, Renewable Energy. We favor commodity and companies that mine uranium and lithium for green Energy Industry.

Good green Companies:

Best Lithium Producers

• Albemarle Corporation (NYSE:ALB:US)
• Jiangxi Ganfeng Lithium (OTC Pink:GNENF,SZSE:002460)
• Lithium America Corp (LAC)
• Sociedad Quimica y Minera S.A. (NYSE:SQM:US)
• Allkem (ASX:AKE, OTC Pink:OROCF)

Some of the problems that markets will have to face in the near future:

• Increased food and energy prices are causing acute trade imbalances and civil disorder in the most vulnerable countries. Europe will enter to recession.
• China, COVID pandemic continues, massively affecting its economy. Simultaneously, the Chinese property complex – key to Chinese economic growth – is now under dire stress.
• Greatest fiscal tightening in history as governments withdraw COVID stimulus will impact companies’ margins and profitability.
• Population decline will pose threats to economic growths. No single G7 country’s is producing new born at replacement rate.
• Climate problems, higher temperatures, on all continents will have a major impact for agriculture next years.

We see now all vectors for an epic super-bubble because all of the assets, stocks, bonds, houses are overvalued. Right now we experience first stages with inflation and interest’s rates surge but will have sooner than later lower corporate margins and unemployment.

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US July CPI +8.5% y/y vs +8.7% expected it's the first good sign about inflation

But let's analyze data below:

• CPI energy -4.6% vs +7.5% prior
• Gasoline -7.7% vs +11.2% prior
• New vehicles +0.6% vs +0.7% prior
• Used vehicles -0.4% vs +1.6% m/m prior
• Owners' equivalent rent +0.6% m/m vs +0.6% prior
• Food +1.1% vs +1.0% prior
• Real weekly earnings +0.5% vs -1.0% m/m prior

Stocks   are up with large gains SPX over 2.13% and Nasdaq NDQ over 3% Dollar down DXY over 2%. Instead of  this small bounce in market  Sentiment we don't think will last more than few days.

Goldman Sachs not expect inflation to drop too far from here!

Inflation will not go too much lower because:

• The price of cars (main component of core CPI) will stay high for months because production problems and distribution chains problems
• Retailer excess inventory will not have any impact on prices. GS estimates currently $20 bn—this translates to 3% of annual retail spending and 0.5% of total core goods spending. That only translate to 0.1% of downward pressure on inflation  
• We do, however, continue to expect the strong dollar and easing supply-chain constraints to weigh on import prices later this year, and in turn on consumer goods prices by the first half of 2023
• Consumers have made changes in their shopping behaviors, like switching to cheaper brands or pivoting to dollar stores to get their essentials.
• Covid Cases are surging in China that will affect distribution Chains

On others investment front investors must seek exposure to green Energy and Electric Vehicles (EV) because the Senate's deal targets clean energy and electric vehicles. The Senate has passed the Inflation Reduction Act; amid its multifaceted, approximately $370b of energy-related spending, both the clean energy theme and the electric vehicle theme are key components of the bill and the primary focuses of this commentary.

Electric vehicles and the broader EV value chain could experience accelerated demand from tax credits, government EV purchases, loans and grants.

Symbols like TSLA NIO RIVN QS BLNK HYILN VLDR Plug HASI NEEE will benefits from this law

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After big rates hike by FED and ECB, investors are hoping that in the following year, central banks will start to normalize rates, therefore Stock market show a bounce back (SPX is near 4.000).

We think it’s a short-lived bounce but a good opportunity for a Risk-Off trade. We see volatility ahead, after rate hikes, because central banks (FED & ECB) are captive to higher inflation. But inflation is caused by production constraints, wars - and rate rises don’t fix these. If inflation was caused by higher demand, than a rate hike, normally, will have a better outcome.

Getting inflation down to the magical number of 2% would mean recession without any doubt and first half year is showing us that GDP is crushed with a 1.6% contraction. Monetary policy is working with delays and the economy is just feeling the effects of one of the most aggressive hiking cycles in history. Stocks rallied 2-4% each of the last four times, the FED hiked interest rates only to fall in the following weeks. Stocks are still expensive and financial results are disappointing, but investors are thinking that this is the bottom, but we cannot embrace this idea. We will face ugly consequences because interest rates were kept too low for too long time (over a decade), central bankers are responsible for the fact that right now we have a bubble on each economy branch.

Mr. Powel must act in same way as Volcker did few decades ago in 1979 and hike until inflation will land to normal values. His last speech was a hint to more rate hikes.

Do you believe that we will face a soft landing as Powell said few weeks ago?

We believe that we will face a soft landing in the same way that inflation “was transitory” last year, according to Powell (just read our January 2022 article at: https://topfxinvest.com/blog/thoughts-about-the-2022-bear-market). Mr. Powell also opined that we aren’t in a recession, demonstrating again that the leader of the most powerful central bank in the world is the last person you would want to ask about the economy. Last week, economy suffered its second consecutive quarter of negative real growth and there is little reason to expect the third quarter will be any better.

Natixis Investments Managers see higher risks of a recession in the last survey. 64% said that recession is a distinct probability, and 24% said that recession it’s inevitable. Almost six in ten (58%) believe value will continue to outperform growth for at least a few more months, while nearly one-quarter (24%) think value will be on top for a few more years.

"The End of an Era"

Strategists see a world that has changed dramatically in the past six months. After a decade in which the easy money provided by quantitative easing, low rates, and low inflation propelled markets to positive gains in seven out of ten years, the world is moving on. This next normal is marked with greater volatility and greater uncertainty. The big question for most investors may well be: How long will it last?”

If you want to read more about the survey: https://www.im.natixis.com/us/markets/the-end-of-easy-money

Inflation is a brutal and merciless way of resolving structural debt & imbalances of corrupted governments. We see potentially multiple series of inflation & deflationary cycles within short time frames (six month & two years) that will cause huge volatility.

According to CNBC, inflation is a top problem in US.

Traditional investing style (60% stocks + 40% bonds) it’s not a solution today, because bond’s market is underperforming and stocks are crushed.

How to protect your portfolio during these times?!

We can protect from the financial storm that is arriving by choosing the best stocks & ETFs from few market segments that will perform in difficult times:

Commodities: since prices already dropped off and would be a good hedge against risk-off tone. Symbols: CRN, DCUSAS, WY

Carbon Emission: KRBN, CARB, GRN, NETZ

Consumer Staples Funds: WCOS, XLP, VDC, FSTA, YI 111, INC, IBA, IMB

Real Estate REIT: STOR, O, NNN, SRC, UBA, ID.UN, APR.UN

Precious METALS: ZGLDUS, ZSILUS

Low debt & Cash flow Green Energy Stocks

You must avoid at any price Growth Stocks & Crypto Markets.

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We analyzed the last week's performance on each asset class and found that the most resilient category from year to date is Energy, REITs and precious metals (instead of the last rally down of Gold). It’s difficult to find a place to park the money 💵 in this economic and financial outlook. According to Warren Buffet, in a recession environment everyone loses, but some of the people have a small loss and others have high loss.

Even traditional safe heavens offered little protection in the first half of 2022:

• Bonds have historically grown when stocks have plunged, but Treasuries and municipals Bonds sold off in the first six months with -7%, S&P500 Corporate Bond Index is down 15%
• S&P500 is 19% down today, Nasdaq100 with 28% in red, Down Jones 14,5 % in red
• Crypto Markets Bitcoin & Ethereum have lost over 70% from high
• Commodities without energy-related doctor Copper have lost 23% and Cotton 17%
• Precious metals are best performers today with only 3,8 % loss
• Few REITs that have contracts related to interest rates also performed very well: VICI +8.5%, O -3.5%, UBA -0.8%
• Dollar outperformed marked DXY with +12%

So how did we get here?

We get here because of the high Inflation, rising interest Rates, record Energy Prices, war in Ukraine, Covid 19 pandemic and FED easy money printing in this decade. Everything seems to be a bubble.

How long will it last?

Risk off mode will persist this year and also at the beginning of 2023. History of bear markets from '49 tells us that we can stay in the red between three months and 39 months.

How much will the markets drop from Here?

S&P has fallen from 30% to 60% in 13 bear markets. We are reasonable to accept a minimum of 10% draw down from here, but because of amplitudes of the factors that generate this financial cataclysm, we must see a much more loss in Equities. We must understand the psychology of markets and individuals to know how to act.

We think we are before of the Panic stage of the markets right now (see first image). What is your opinion on this current stage? Will appreciate your opinion on the TopfxInvest Facebook Page.

Many analysts that we consulted seem to indicate that a peak of inflation will determine a bottom for stocks. We don’t think that is a true scenario because of the magnitude of the factors that start this bear market. I would be extra cautious before making any big bets on stocks and I’m a big fan right now of high dividend stocks that are resilient to interest rates hikes.

How to act right now, do we have a place to invest?

We prefer to consolidate the Gold & Silver positions, also we started selling Energy & Commodities Stocks that outperformed the market (like Daco Energy DQ, CNQ). We think that Gold will rise after the FED will finish with rate hikes and the Dollar will lose some peace of growth. We also studied the history chart of EUR/USD and when the Dollar is on Parity with Euro, will have some correction on the Dollar Index.

Chuck Berry inspired this article with “No Particular Place to Go”

An interesting topic for a future article will be: How to identify fundamentals of a market bottom or how to store Gold in efficient & safe ways?

Thanks for reading, and I’m waiting your feedback for our articles on our Facebook Page.

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The FOMC (Federal Open Market Committee) meeting consensus was for 50bp rate increase because of this week's worst CPI reading, but Fed hiked with 75bp, and market consensus agreed for other future rate increase this year, and also a 10% inflation which is on the cards right now. Markets are hit hard this week, a Risk-OFF tone was the main trading sentiment among traders.

How Dot Plot was changed:

• June 2022 shows the median rate at the end of 2022 at 3.4%, up from 1.9% in March 2022
• For 2023, the median Fed funds target rate is up to 3.8%, up from 2.8% in March 2022
• In 2024, the Fed projects a Fed funds target rate of 3.4%, down 40 basis points from the end of year 2023

10 to 1 votes for 75 bp hike and Powel opening statement “Inflation is much too high” reveal large consensus and fear from actual economic environment.

Jerome Powel other key statements from yesterday meeting:

• Consumption spending is strong
• Housing Market is slowing
• Tightening in financial conditions could continue to temper growth
• Growth in business fixed investment is softening
• Labor market is extremely tight
• Wage growth is elevated
• We'd been expecting to see signs of inflation at least flattening
• We're seeing inflationary forces everywhere
• We don't know what will happen with supply shocks and how long they will last
• Pace of hikes will depend on incoming data
• Does not expect 75 bps moves to be common. Either 50 or 75 bps seems most likely at the next meeting.

SP500 are at the worst levels for this year, and inflation is at the highest levels because of the Covid-19 outbreak and the war between Russia & Ukraine.

Beijing and Shanghai (China) are experiencing a "strongly explosive" COVID-19 outbreak right now and this will add fuel to the fire of the Recession. Even Chinese Communist Party Media disclose some information on this new Covid-19 wave (https://www.globaltimes.cn/page/202206/1267831.shtml) but you can read more unbiased opinion at Voanews: https://www.voanews.com/a/beijing-sees-explosive-covid-outbreak-shanghai-conducts-mass-testing-/6613499.html. Authorities ordered PCR testing for all residents in 15 of Shanghai's 16 districts this weekend, and five districts have restricted residents from leaving home during the testing period.

What about recession?

Goldman Sachs SP500 forecast SP500 to 3150 according to David Kostin only if the EPS estimate moves to $225.

Morgan Stanley is looking for a "tradeable low" in the SP500 suggesting price 3,400 because "growing evidence of slowing growth and the risk to earnings”.

Our Portfolio Recommendations

Regarding our Portfolio we added some Gold this week at the price 1815 and also ZIM stock instead of Economic tailwinds. We like ZIM because they have signed new charter agreements on eco-friendly vessels to expand its services. ZIM is extremely undervalued at PER 1.83 and also, it’s a company with low debts. Company has huge cash in bank accounts of 2.8 billion $ that is equivalent to 40$ per share price. We bought at 49$ and we have a target of 75$ per share, without taking into consideration the past dividends.

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EU inflation is 6.1% and rate hike is mandatory. From the previously forecasted values of 3%, we have a deviation of 3% which is caused by multiple factors:

• Russia & Ukraine conflict
• Energy Price
• Supply Chains disruption

Goldman Sachs also cut their US economic growth forecasts from 2.6% to 2.4% this weekend.

Slowdown in growth should help lower job openings, it is also likely to raise the unemployment rate a bit.

Blankfein former chief executive of Goldman Sachs and currently senior chairman of Goldman Sachs says "firms should be prepared for a recession this year" and also:

"We're certainly heading - it's certainly a very, very high risk factor. And there's - but, you know, there's a path. It's a narrow path. But I - I think the FED has very powerful tools. It's hard to finally tune them and it's hard to see the effects of them quickly enough to alter it."

https://www.cbsnews.com/news/lloyd-blankfein-face-the-nation-transcript-05-15-2022/

FITCH says that the global recovery is to slow down in 2022 and 2023. Policy interest rates are rising, and FITCH believes that this marks an end to an era of very low borrowing costs for governments.

Remarks from Powel has changed a lot from the last year when he considered that the inflation was transitory and some pain is needed.

“The question whether we can execute a soft landing or not, it may actually depend on factors that we don’t control. The process of getting inflation down to 2% will also include some pain, but ultimately the most painful thing would be if we were to fail to deal with it and inflation were to get entrenched in the economy at high levels.”

This week, CPI is lowering from 8.3% to 6% (Core CPI). This means that inflation will not decrease, it will slow the pace of growth, and the price of goods are not going to decline. The price of goods will grow with a moderate pace.

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FOMC Lift rates with only 0.50 % as expected

0.5% increased rates were taken by Markets with lots of optimism because Powell announced 75 BP hikes off the table for next two meetings. Sentiment was RISK-ON, instead of rate increases because trader's already priced in 0.5%.

Market Evolution NY Closed: 

• S&P 500 up 122 points to 4298, or 2.9%
• Nasdaq +3.1%
• DJIA +2.8%
• DXY 0.15%
• VIX -13%  

Taking out of the table 75 BP hike, for next two meetings, Powel will sustain a new bounce into risk assets but I think it's short-term (1-2 weeks) until it will have new inputs from economies. Anyways, FOMC meeting, it's a fundamental shift for Risk instruments.

In the currency markets we see movement according to the risk sentiment: AUD & NZD UP and JPY & CHF down.

Some important remarks from Powell press conference regarding economic statement:

• Inflation is much too high
• It's essential we bring inflation down to keep a strong labor market
• Price pressures have spread to a broader range of goods and services
• Wages are rising at the fastest pace in many years
• The labor market is 'extremely' tight
• There is a broad consensus that 50 bps hikes should be on the table at the next couple meetings
• We are prepared to adjust any of the details or our approach
• Lockdowns in China are likely to further snarl supply chains

You can read all here.

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I have never seen in 20 years of investing such a confluence of fundamental factors pointing to a bear market scenario for stocks like this year.

First, it was the Covid19 pandemic outbreak that disrupted the supply chains, then it was the conflict between Ukraine and Russia. We’ve seen the Oil price ranging from 0 to 150$ starting with the middle of 2020 and up to 2022.

FED Chairman Jerome Powel finds that inflation it's non-transitory anymore and the EU representatives expect 7.8% inflation this year.

The war between Russia & Ukraine also fuelled the inflationary pressure. The FED already hiked the interest rate, but The European Central Bank kept its benchmark interest rates unchanged, Australia & UK also will hike it in the following months.

Stagflation is our base expectation for this year and we’re avoiding buying Growth Stocks. We’re looking forward to start investing at lower prices.

Our recommendation for January to keep the Dividends Stocks and sell the Growth Stocks was beneficial: from year to date: 

• Vanguard High Dividend Yield Index Fund ETF (VYM) it's up with 0.9%
• Large Caps Ishares ETF (IVW) it's worst performing in red with -14%
• SPDR SPX 500 (SPY) registers -7% from 1 January
• Small Caps CORE (IJR) in red with -11,4
• Large Cap Value Stocks (IVE) -1% near to Dividend stocks
• Mid-Cap Value Stocks (IJJ) -3%
• SPHB (high Beta) -9%

What is the thesis behind this evolution?

The theory is that elevated risk of high inflation and slower economic growth favour the shares with relatively rich payouts.

In a recent letter to JP Morgan Chase (JPM) shareholders, Chairman and CEO Jamie Dimon warned that the war in Ukraine could collide with rising inflation to slow the domestic economic recovery and alter global alliances for decades to come.

"They (referencing Ukraine and inflation) present completely different circumstances than what we've experienced in the past-and their confluence may dramatically increase the risks ahead. While it is possible, and hopeful, that all of these events will have peaceful resolutions, we should prepare for the potential negative outcomes."

What are our expectations for this year:

• 50 points rate hike in the EU in May, maybe 75 points if the Energy Sector and food prices will grow much more from now.
• The global economy, even before the rate hikes, is deteriorating far faster than the consensus expects.
• We expect consumer confidence to suffer in the months ahead and we will continue monitoring the indices.
• Food shortages and rising food prices can converge to a possible global food crisis in 2023 and social uprisings.
• Globalization is dead, and also the global cooperation between the major actors: USA, Russia and China for decades from now.
• European inflation is at the worst levels in the last 75 years - and the ECB will have no choice but to raise rates faster than the consensus expects.
• Europe will be in Recession from the middle of 2022.

In a recession environment nobody wins but what counts is who loses the least.

According to what we mentioned above, we prefer to invest in bank Indexes in Europe, because the banks are likely to benefit from a rate increase scenario that will happen this and in the next year, and we will avoid investment banks. We acquired the EXX ETF this month.

Also, we maintain our bullish view on grains and we consider now that it was a mistake to close some of our positions in March https://topfxinvest.com/blog/we-anticipate-the-food-crisis-in-2022 

We want to close some Energy positions with profits this year on CNQ, PBR, TPZ, PIF, ALVOF.

I see carbon Emissions contracts as a very good hedge against inflation and we acquired last month CARB ETF & NETZ stock in Canada.

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The rate hike was priced in and the market was on RISK-ON mode yesterday. Main question for the FED yesterday was, what percent will be the hike?

To stop inflation 0.5% was a better idea to hike but voters don't want to risk a recession with actual conflict between Ukraine-Russia. The surprise is 7 hikes in the dot plot instead of 5 hikes. The 10 years yield is now lower versus pre-rate decision level. Regarding the war in Ukraine, Powell said “The implications for the U.S. economy are highly uncertain, but in the near term the invasion and related events are likely to create additional upward pressure on inflation and weigh on economic activity. The invasion of Ukraine by Russia is causing tremendous human and economic hardship. The implications for the U.S. economy are highly uncertain, but in the near term the invasion and related events are likely to create additional upward pressure on inflation and weigh on economic activity.”

Regarding the US Economy, we have below stances: “Indicators of economic activity and employment have continued to strengthen. Job gains have been strong in recent months, and the unemployment rate has declined substantially. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures.” You can read full press release here:

Surveying the FOMC's 18 members, the dot-plot showed that 12 FED officials predicted at least seven total rate hikes in 2022. On the high end, one FED official expects the central bank to raise rates above 3% during the year, from the level around 0.25% currently in force.

Please check below the dot plot below:

12 of 18 saw 0.9% in 2022, 11 of 18 saw 1,9% into 2023 annual median at 1.6%. Median interest rates for 2024 is 2.1%

Macroeconomic implications:

Energy Financials Sectors will outperform, we consider that it's a good time to buy bank's stocks and sell High growth stocks like tech. Instead of a short term rebound for Nasdaq's & S&P500, we see down in the long run. I can't see inflation slowing down in the long term and 0.25 it's not enough to calm but the FED was forced by the actual Geopolitical climate.

Euro will be much weaker in the long run than the dollar. Unfortunately for the EU, in the Eurozone there are plenty of headwind that affect growth: price of energy, war between Ukraine & Russia.

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After high Inflation in US and Europe, the Covid-19 pandemic outbreak, a new event like war between two major countries affected the markets. War between Ukraine and Russia pushed this morning Gold over 2000$, Oil to 124$, Soybeans 1686$ and Corn to 775$. During war times precious metals, Oil and Grains perform well instead of risk assets like stocks.

High level of sanctions from the Western Economies will destroy the Russian economy in the medium term. The Putin regime will fall in the near future because you can't win a war completely isolated from western world and you can't govern with terror and mass-media censorship.

According to the last Russian laws, you can get 15 years in jail if you transmit information from the battlefield that is not what the regime wants. All social media are closed, also internet websites like BBC, CNN, The Guardian etc. If the Putin regime it's not quickly removed, the Russian people will live like in the North Korea.

Also, some important brands like Toyota, Ford, BMW, Mercedes, VW, Oracle, SAP, Mazda, Nike, PayPal, Apple, IBM, DELL, Mitsubishi have closed the doors to the Putin regime. The Russian currency is moving down by over 30%, and the Moscow stock market is closed for three days in a row.

With the US & EU already facing the highest inflation in over four decades, triggered by the Covid lockdowns and restrictions, and the February CPI release this week anticipated to show an escalation during the previous month, the real possibility of an economic recession is even larger.

Therefore, the Federal Reserve's upcoming policy meeting on Mar. 15-16, will start a new interest rate hike cycle and it's not advisable to be exposed on the growth stocks. We still own high dividend stocks in the energy and finance sectors and also, we are keeping our Gold & Silver positions. We anticipate further weaknesses in stocks this month.

The United States and European allies are exploring banning imports of Russian oil, Blinken said on Sunday, and the White House coordinated with key Congressional committees moving forward with their own ban.

"A boycott would put enormous pressure on oil and gas supply that has already felt the impact of increasing demand. Prices are likely to rise in the short term, with a move toward $150 a barrel not out of the question Such a move will put further pressure on global economies, pushing inflation higher, leaving central banks debating how quickly rate hikes should be implemented." according to some analysts from CMC Markets.

"The war has clearly increased the risk of a stagflation scenario for the euro zone, where you will have a stagnating economy and much higher inflation on the back of high energy prices," said Carsten Brzeski, global head of macro at ING.

We stand with the Ukrainian people that fight for their freedom and we want to help mothers with children that are refugees. Right now, we are facing a real drama on the Ukrainian border as the refugee and their children are staying over three nights on -15°C without food and water.

It's estimated that there will be over 10 million refugees this year, if the conflict does not stop soon.

If you want to help refugees, you can donate on these links:

https://www.unicef.org.uk/donate/donate-now-to-protect-children-in-ukraine/ 

https://donate.unrefugees.org.uk/ukraine-emergency/~my-donation

https://donate.redcross.org.uk/appeal/ukraine-crisis-appeal

https://www.icrc.org/en/where-we-work/europe-central-asia/ukraine

https://www.savethechildren.org.uk/

https://donate.careinternational.org.uk/page/100263/donate/1?ea.tracking.id=e75_orgsocial

https://www.peopleinneed.net/

https://msf.org.uk/

You can help Ukraine Army here:

https://www.portmone.com.ua/r3/uk/terminal/index/index/id/118103/

Слава Україні! (Slava Ukraini!)

Glory to Ukraine!

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• The decision on rate hikes is not needed before June meeting
• Any speculation about calendar of future lift-off is at this stage premature
• We will retain our full optionality about pace of normalization
• Its calendar will remain a gradual, state-dependent and open in moving from one stage to the other
• Keeping net asset purchases open ended from October would not be appropriate
• APP purchases would end in Q3
• another way to enhance optionality could be to remove the word "shortly" from the forward guidance on asset purchases
• Optionality would mean that lift-off could possibly take more time if warranted

Decision on partial troop withdrawal has been taken added some optimism on markets (SP500 +1,58% NDQ +2,58) but we still have questions about inflation and growth

Oil & gold come back to previous levels.

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Yesterday was a special day for trading markets because of rising in CPI. Stocks were up with over 2% percent at the start of the US session but reversed sharply with over 5%. Inflation surprised markets expectations but more interesting was FED Bullard (a voter in monetary Policy's) reaction to CPI:

He sees a 100-basis point increase by July 1. 50 BPs in March but will defer to Powell. Would favour changing rates between meetings. FED balance sheet reduction may require asset sales.

What is in CPI to justify the reaction above?!

• Highest reading in 40 years
• m/m CPI 0.6% vs 0.5%
• Real weekly earnings -0.5% vs +0.1%

Core inflation:

• Ex food and energy +6.0% vs +5.9% y/y expected
• Prior ex food and energy +5.5%
• Core m/m +0.6% vs +0.5% exp
• Prior core m/m +0.6%

1. Housing +0.7%
2. Owners rent +0.4%
3. Food +0.9%
4. Energy +0.9%
5. Gasoline -0.8%
6. Medical care +0.6%
7. Apparel +1.1%
8. Services +0.4%

Only Ice scream is 👇.

You can read detailed report here.

What are the reasons for these readings?

First Supply chain bottlenecks because Covid outbreak and accelerated economic growing from 2015 just look at SPX500

Citi Bank now sees 50 basis point Fed

What will happen from here?

I'm expecting inflation to peak in April-May and rates to go near to 4% in the future. Are we at the starting point of a depression?!

We intend to grow up our exposure on Gold & defensive stocks.

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After the meeting between Putin and Macron, the markets have regained some losses from the first month of the year.

Macron: "Putin told me that he would not be behind any escalation in Ukraine". Instead, the meeting is not solving the problem between the Russia and Ukraine, but markets have anticipated a lower narrative tone in the future.

Better than expected, Atlanta FED GDP now rises to 0,7 from 0.1 also fuels a positive Risk tone.

Some good news from the inflation front announced by ECB Villeroy also helps stocks. Villeroy said:

“Inflation hump should be temporary.

French inflation is to gradually diminish within a month.

I guarantee we will do what is needed for inflation to return to around 2% over time.”

Stocks are up SPX500 0,84%, NDQ 1,21% DJI +1% and VIX -5.67%.

Instead of some support in stocks, investors are concerned about the tightening announced in March from FED.

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The ADP job data surprised to the downside this month: - 301K versus +200K estimate.

All economic branches were down this month:

• Goods -27K
• Manufacturing -21K
• Services -274K
• Transportation and Utilities -62K
• Leisure and Hospitality -154K
• Construction -10 K (Also Canadian Building Permit felt -0.3 over estimate)
• Education & Health Services -15 K
• Small firms -144K decline
• Medium firms -59K decline
• Large firms -98K decline

The fell was the largest since April 2020 because Omicron outbreak, according to FED officials.

BOE has increased official bank rate by 0.25 points to 0.5%, today.

Eurozone inflation hits new record 5,1% CPI versus 4,4% expected (Highest since 30 years), that will put more pressure on ECB today.

Bidden sent 3k US Soldiers to Romania Poland and Bulgaria.

IMF Chief Georgieva: Geopolitical tensions make uncertain outlook for global economy.

Regarding our portfolio, we shrink our exposure to growth stocks and closed some losing positions on companies that have large debts or lower growth expectation (ASAN, BILL, W, NVCR, RDFN), and further, we closed two days ago our grains exposure with 20% percent profits in three months. We expect to 💪 our dividend stock's exposure's and add to precious metal positions if we see another 2k points decrease in Gold and Silver after FED rate increases. We think market will retest soon, lower point from January and US Dollar 💵 will stay in upper zone. US dollar speculative positioning and bullish sentiment are surging. SP500 Retest Of January Lows  is about to begin.

You can check real-time  our risk-on/off tone indicator.

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