Nothing like a good profit a warning will end up

There are times in the morning that, apart from going to bed too late and getting up early, you have to re-read things several times to try and fit them together like a Lego game in order to understand the logic behind the behavior of the market. There, today, June 8, 2022, I not only went to bed too late, but I must also say that I find it difficult to understand the logic of the markets. It is true that it is never easy, except that there, it is really necessary to vibrate the brain well in order to reach certain conclusions. And I must say that the fact that the bulls win in the end will not be enough.

Vote June 8, 2022


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A bad day starts

Let’s take things in order. At the beginning of the day, European markets focused on the fact that the price of Brent crude has crossed $120 and this does not bode well for inflation. It’s true that at $119 last week it might have been good, but here at $120, everything is going to hell. We wouldn’t say panic was between us, that obviously would overstate it and that’s not my style at all. to inflate things.

However, we’re back to the good old prices I’ve been using for months, like: “A barrel over $100, slack in the closet.” And so, we started getting a little worried, and since last week wasn’t too bad, we told ourselves there was still room for profit taking. And then, it must be said, Goldman Sachs is back to layer it with his announcement: “At home, we thought a barrel would go up to $140 (or even $160) this summer” and that: “The price of a super liter could easily touch 3 euros.” That’s fine because at 2.32, I’m already cutting gas with Red Bull Vodka, because it’s cheaper. So, I’m wondering if I’ll start dripping potatoes myself in the garden bed to make up for it.

rotten atmosphere

At lunchtime, when we were just beginning to prepare for the opening of New York, the World Bank came to announce that it was drastically lowering its growth prospects for the planet and that the rest of the year was going to be bad in terms of just about everything. I’ll give you the numbers and how much their forecast is correct, just know that 2022 growth will be 2.9% – hopefully they won’t come back in 3 months to announce they are still 1% correct and then 1% more right before Christmas. Yes, because you understand, when we announce a growth target for an entire planet at the beginning of the year, as the World Bank did on January 2, we have the right to correct several times over the next 12 months, so as not to look so stupid on December 31st.

And then, since there is a war that started this year, they have the right to edit again and all that, while going through the “beginning” and by touching the bonus with the clip. Not to mention the right to build a hotel on the Zurich Paradeplatz. We generally know that the World Bank always comes back in the last two weeks of December and surprisingly corrects its annual growth forecast. It must be said that it is still easier to make predictions when you already have the data for the last 50 weeks out of 52 weeks. It’s a bit like if you can play EuroMillions and have the right to validate your ticket after seeing the first five balls come out, it still increases your chances of winning!

In short, the World Bank yesterday lowered its growth forecast. In a normal world, this would be bad news. However, we are not in an ordinary world.

Target: in cabbage

Right before New York opened, we therefore had to internalize the fact that oil was going to $160 – which 143% of experts agree (plus Goldman Sachs) – I additionally find that it’s starting to look quite a bit like “hit”. And it hits, we know how it ends. It usually ends up a bit like Terra-Luna. In addition to oil, we had the World Bank that came to warn us, and as if that wasn’t enough, Target came in to issue an earnings warning.

It wasn’t a “monster” surprise given the numbers released two weeks ago and the number of potential scammers listed at the time. The title had largely paid the bill for this amount, since the title since the end of April is still 38% in gum. Last night, they added more and more anxiety in the minds of the consumer who was starting to wonder more and more whether he was going to keep spending at Target or bury himself in the backyard while waiting for it to pass. In short, the news wasn’t good, but it wasn’t surprising either. Add to this the statements of Paul Krugman, still a Nobel laureate in economics who said that cryptocurrency was the equivalent of the 2007-2008-2009 subprime crisis, all filled with advertisements here and there, by second-rate educators who believed: “The march will not Hold up and the S&P500 will go to 3200 before school starts and you’ll have just about everything for a good day, world class edition.

except no

except no! So of course the Europeans took full advantage of the bad news to wind up, but the Americans took advantage of it to end up with 1% almost everywhere because buyers were strong and threw themselves on tech titles, oil companies, and just about everything they could get their hands on except the consumer sector. Target is down barely 2.3% and in the same sector Kohl’s stock is up 9% – but it must be said that they were under the threat of a takeover by a private equity fund, and we’re not all having the same issues.

So the question we can ask is the following:

“But why did we go up??? »

And we’d be right. We can always find an excuse, but let’s just say yesterday we heard it:

– The market price was the worst – that’s right, it seems that the more bad news in his face, the higher his price.
It is also said that now that we know that the Fed is going to raise interest rates aggressively to stop inflation, they will get there and we will end up having a soft landing – that may also be true, except that we are all the same The Fed is walking in sight and the sky is so cloudy, that cumulus clouds are piling up on the reliefs and we can no longer remember how the artificial horizon works. We also totally forgot that the Fed has been on the street in terms of forecasts for about a year.

But it doesn’t matter, we seem satisfied with it and the speakers are in “sado-maso” mode, and the more we hit them, the more they like it. In conclusion, there are times when it’s best not to ask too many questions and let yourself carry on the wave without researching too much for fundamental reasons when you live in a world where the basics no longer have the same value as the factor. We gave them at the right time.

In Asia and elsewhere

This morning in Asia, we are up 0.8% in Tokyo and 1.7% in Hong Kong. China’s rate is down 0.7%, but that’s likely because we saw an article about a new lockdown somewhere in a city we hadn’t heard of before. On the rationale for the current rally, experts explained to us that participants are “happy to see prices go up because it means central banks are taking action”… Simply put, when we think we’ve seen everything, well we really haven’t seen anything at all. I’ve been here for almost 35 years and get the impression I’m like day one: “Like a fool watching the market go in all directions and screens flashing green and red, without that there is any rationality in the rhythm of the blinks.

Otherwise, gold is $1,847 and has to play ONE, TWO, THREE, THE SUN!!! Oil has stopped moving a lot, we talked about it, but we will remember that WTI is at $119.83 and Brent is still above $120 to please Goldman Sachs. And then Bitcoin is $30,000, we can justify our wanderings with the words of the Nobel Prize in economics, while discouraging them, knowing that Obama was also a Nobel Peace Prize laureate, and when we see this he made as wars, one can ask questions about theories about Krugman.

Yes, I know, that’s a long way off, but I’m not the one who gives the Nobel prizes, otherwise Macron would have won peace, physics, mathematics and medicine a long time ago, so he’s strong in everything. In other news, the lead trader for Trafigura believes that oil could have an equivalent upside and threaten the economy. not kidding?? So it was officially a hit. There is also Yellen calling on Congress to do more to fight inflation. It’s funny to see former central bankers and central bankers, when they no longer know what to do and panic, turn to politicians who know even less than they can do. We are not into nonsense. Then we notice that Novavax got its approval for its own anti-virus vaccine — it’s about time, because we’ve forgotten what it is, COVID and after that, quitting Musk has become less willing to take Twitter back. Suddenly freedom of expression is less important than it was a month ago.

Today’s numbers

In terms of today’s numbers, we will have unemployment in Switzerland and Europe. France’s trade balance, Europe’s GDP/GDP and new mortgages in the US – numbers to watch as the real estate market may be the last shoe to drop, especially with prices rising. There will also be oil inventories that will push Crude Oil higher as everyone is expecting.

Futures are down 0.35% – as much as that means anything. Until then, hope your coffee is strong, your croissants are gluten-free and inedible, and have a nice day. We’ll meet tomorrow, here… to try to see things more clearly!

Hey, Credit Suisse just issued a profit warning for the second quarter, and it looks like it’s Ukraine and interest rates’ fault. Nothing to do with the rest. The market should go up, everything is fine. All at the price.

Thomas Villette
invest

“Nothing is certain in this world, except death and taxes.”

-Benjamin Franklin

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