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28.02.2022 – The West’s sanctions take effect, the bank run begins in Russia. The ruble plummets. In addition, the Russian army is not making much progress – even the hitherto hyper-pacifist Germany is supplying weapons. The investment world is thus divided in two: Assets in the West are likely to stabilize. Russian investments are unpredictable, as the stock exchange is likely to suspend trading in the RTS index time and again.

Since the Russian Central Bank has parked a large part of its foreign exchange reserves in the West, and since a partial SWIFT ban is now actually taking effect after all, Moscow can only counteract with difficulty – and sell dollars against rubles, for example. The ruble has plummeted to a new historic low. The Russian Central Bank raised the key interest rate by 10.5 points to 20 percent. It also banned foreign sales of Russian securities. Long lines have formed in front of ATMs in Russia – a collapse of Russian banks is likely. The new, gigantic USDRUB price gap will be closed at some point, just like the smaller gap from the previous week. Only when? Only as soon as there are signs of a ceasefire, or if China rushes to the rescue with foreign exchange reserves, is the ruble likely to recover to old levels.

Source: Bernstein Bank GmbH

Otherwise, everything continues to be possible and the opposite of everything. The invasion will either end in a III. World War. Then we don’t need to talk about investments anymore. Concrete signs of this will throw the stock markets towards zero.

A Russian victory

Or the Russians will first win the battle for Ukraine. Then Volodimir Selenski (what a hero, just like the Klitschko brothers) should be flown out to the West – allegedly he is protected by Western special forces. Selenski would then be allowed to lead a government-in-exile from abroad. Then western Ukraine around Lviv could join Poland. This would automatically make the residual state part of NATO, because only the Polish parliament would have to decide on admission and no one else – and then things would get exciting. For Russia, the occupation of Ukraine would be an expensive mortgage. In these cases, Western assets recover, Russian ones are likely to lag because of sanctions.

A Ukrainian victory

Or, against all expectations, Ukraine wins. The resistance is incredible – apparently Kiev drafted some 100,000 reservists over the weekend. Battle-hardened free fighters with Ukrainian roots from the French Foreign Legion, the British Army, or the U.S. Army are expected to arrive in Ukraine soon. We suspect that many young Russian recruits have begun to wonder – where are the people who cheer for them because they are supposedly liberating Ukraine from Nazis? And then why is Ukraine ruled by a Jewish president? And why do the Russians, who are raging just as the Wehrmacht once did, have to fight against their own brother nation? It is quite possible that Russian soldiers will defect – especially if the Chechen Islamists fighting for Vladimir Putin commit a massacre of Slavs.

We think even a revolution in Russia is possible. Or Russian generals eliminate Putin to prevent a nuclear escalation. Then the stock exchanges in the essence and also in Moscow would jump up – and with them the ruble, because then the sanctions would fall.

Congratulations, Vlad!

Otherwise, Putin has damaged Russia’s future: NATO has finally woken up. Hopefully, the West will end its energy dependence on Russia. How about a little boycott of oil, gas and coal from Russia? The Russian monetary and probably ensuing economic crisis is reminiscent of the chaos of the early nineties – and the military aggression of the actions of Soviet apparatchiks. For them, the Afghanistan campaign was the beginning of the end. Putin has thus set his country back decades. We stay on the ball for you – Bernstein Bank wishes successful trades and investments!

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.

25.02.2022 – What a trading day yesterday: Wall Street turned on its heels and raced from a deep minus to a plus. Which may have to do with the realization that Ukraine is lost and Russia doesn’t really need to fear tough sanctions. And with short covering.

The turnaround in high-tech stocks was particularly impressive, with the Nasdaq 100 first sliding about 4 percent to close with a gain of just over 3 percent. Wonderful times for traders who were right. There should be more to come, as the MACD is still in oversold territory, see below. In addition, the 50-day line continues to tempt. According to the blog SpotGamma, many large addresses had sold puts and bought calls – and stocks served as a hedge for options traders. Nomura also sees yesterday’s turnaround as a result of repositioning in the options market.

Source: Bernstein Bank GmbH

Here is already the appeasement
According to the financial blog ZeroHedge, the stock market reacted yesterday to Joe Biden’s speech, in which tough sanctions against Russia did not appear at all. Told you so. Now the most brilliant politicians of all time are lashing out over sanctions. Surprise: Germany apparently opposes Russia’s exclusion from the SWIFT payment system. And on the best TV ever, SPD grandee Klaus von Dohnany reminded us that Germany would be wiped out if the NATO alliance case was triggered. There you go, this courageous attitude will continue to spread among our elite: Bye-bye Baltics – if Russia invades you, you’re on your own.
Franconia as a safe haven
So what’s next? George Saravellos, forex strategist at Deutsche Bank, referred of course to the Ukraine crisis: Everything depends on the sanctions imposed by the West. Since Switzerland has so far refused to comply, the franc could become a safe haven. There is also the question of gas prices, which poses risks for the euro.

Soon it will probably be over
We assume that the weapons in Ukraine will soon be silent and a pro-Russian government will be installed. This article reveals Vladimir Putin’s world of thought: Article by Vladimir Putin ”On the Historical Unity of Russians and Ukrainians“ • President of Russia (kremlin.ru) The quite densely researched essay portrays Ukraine – Malorossia, Little Russia – for centuries as inseparably connected with Velikyrosia – Great Russia. Putin considers a separate Ukrainian national consciousness an artificial product of right-wing radicals. And here is the London School of Economics’ replica: “There is no Ukraine”: Fact-Checking the Kremlin’s Version of Ukrainian History | LSE International History
As usual, the Kremlin undercuts the historical trauma of the Holodomor – Putin deals with it with the aside that it was a famine that affected everyone. But this deliberately induced horror in the early thirties was – apart from previously existing independence efforts of the Cossacks anyway – THE event for the formation of a Ukrainian national consciousness par excellence. RUSSIAN communists murdered millions of people, also to eliminate the Ukrainian national movement. You can read about the Holodomor here: Millionen tote Ukrainer: Der Holodomor – reitschuster.de – little is reported about this in German schools, media and universities, because one left-wing crow pecks no eye out of the other.

Next stop Vilnius?
By the way, in the article Putin actually mentions a Grand Duchy of Russia-Lithuania, which broke up only when the Catholic faith replaced the Orthodox one. And only after that, Poland-Lithuania came into being. So: maybe next it’s the turn of the Baltic States with a small invasion. Otherwise, we assume that the dust will settle on the Ukraine issue for the time being. And that investors will use the liquidity gained in the sell-off for a further rebound. But as mentioned before: Anything is possible here and the opposite of everything. Especially since many traders prefer to take time out before the weekend. Bernstein Bank keeps an eye on the situation for you!

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.

24.02.2022 –So now it’s on, the invasion of Ukraine. As predicted, the world stock markets are plummeting. First and foremost the Moscow RTS index and the rouble. Traders should now keep a cool head. In view of the Western kowtowing and because of the likely quick surrender of Ukraine, the world could quickly return to business as usual.

Meanwhile, according to the Moscow Times, the Defence Ministry in Moscow reported that the Ukrainian army was leaving its positions in droves. In the reports we are seeing, there is no sign of the Ukrainian army fighting back, only Russian tanks rolling towards Kiev – and a mass exodus. The current large-scale attack indicates that Russia will occupy and demilitarise the whole of Ukraine – not only the Donbass could become a buffer state against NATO. Kiev gets no real help from the West: Berlin lights up the Brandenburg Gate in yellow and blue. The Baltics and the USA have supplied weapons. That’s probably it.

Source: Bernstein Bank GmbH

It is doubtful whether Western sanctions will be effective against a country that has no debts and is sitting on considerable foreign currency reserves. Sooner rather than later, Moscow is likely to sell dollars against the rouble, which has fallen to a new record low, in order to stabilise domestic prices. In this respect, the gap that has just been torn in USDRUB is likely to be closed soon. Cynically, one has to say: “Buy Russia” is imminent. This is not only our view, but also that of the blog AdventuresInCapitalism.com, for example. So courageous traders are going against the tide – especially, but not only, with Russian assets, but with all dived indices.

This West is no opponent
In fact, the Kremlin’s calculation is likely to work. The Russian president has correctly analysed the rampant green-left rot of the West – pacifism above all, gender gaga, hostility to its own culture. The Pentagon’s failure in Afghanistan, the weakness of the US president. Germany’s years of pandering to Moscow through Nord Stream 2, the betrayal of Ukraine that went along with it. A chancellor who, by shutting down nuclear power plants, has handed Germany over to energy supplier Russia.
So watch out for the imminent accumulation of appeasing statements in the West – you have to weigh things up and differentiate, Russian interests are very important, the German economy has been hit, sanctions only affect the people, let’s not have a Third World War. At the latest, the increased appeasement is the signal to get back on track.

Home to the Tsarist Empire
And now comes the big but: things will get exciting if, contrary to expectations, the West does impose severe sanctions that bring Russia to its knees. Or if Putin continues militarily. In his delusional speech to the nation, he made it clear that for him Ukraine has belonged to Russia for centuries – one people. Of course, he left unmentioned the horrific murder of millions of Ukrainians by Russian communists in the Holodomor. He also spoke of the former Grand Duchy of Lithuania-Russia. What we actually know as Poland-Lithuania. How do you think NATO would react if the Baltic States were attacked?

Danger for Taiwan
And things will really heat up if China now annexes Taiwan – the chances are good, because there is a weakling in the White House. In all these cases, of course, the presumed rebound shifts way back – and the entry level down. These are potential fronts to keep an eye on in real-time news. Bernstein Bank stays on the ball for you!

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.

22.02.2022 – Moscow has recognised the breakaway Ukrainian republics of Lugansk and Donetsk as independent. Russian President Vladimir Putin ordered the deployment of troops to the so-called People’s Republics last night. The first tanks are said to be rolling already. Goldman Sachs and Rabobank venture a forecast of what all this means for the markets.

This is what Ukraine is facing now
Told you so: Just as we have predicted here several times, it has come to pass. Now there are several possibilities: FIRST – Russia occupies the new republics within a few days; this follows the pattern of South Ossetia and Abkhazia, where Russia stationed troops after the 2008 war against Georgia and recognised the dwarf regions as independent.

Source: Bernstein Bank GmbH

SECOND – Russia also occupies the entire south of Ukraine to draw a corridor to Moldova to the breakaway pro-Russian territory of Transnistria. This Novorossia, as the separatists would like it to be, would make up about a third of Ukraine. THIRD – the crisis will be settled diplomatically after all. We see the odds at 45-45-10 for the three scenarios.

War on – risk off
In the first two cases, depending on Ukraine’s resistance, this will trigger a violent market reaction on the short side. This is because many investors will sell off their assets for fear of a third world war. There is still room for downside: Ultimately, not much has happened on the stock market at all, as the weekly chart of the S&P 500 proves. In fact, the SPX is still far from its 200 moving average. That could become the next stop. If not the Corona low from 2020.

Here’s how Goldman sees it
Goldman Sachs has calculated the pessimistic case of war on the one hand, and the positive scenario of de-escalation on the other. The analysis was published before the stock market opened yesterday. Here are the results:
– War: The S&P 500 could still fall by around 6 per cent. De-escalation: up 5.6 per cent.
– Stoxx 600: down 9.3 per cent or up 8.4 per cent.
– Russel 2000: down 10.2 per cent; up 9.2 per cent
– Nikkei 225: down 8.6 per cent; up 7.7 per cent
– MSCI Emerging Markets: down 7.7 per cent; up 6.9 per cent.

Three Rabobank scenarios
Rabobank takes a more complicated approach to the issue of war. According to it, there are three scenarios: A – a short war. Within the next six months, trade between Europe and Russia would be massively disrupted. Oil would rise roughly as it did during the Libyan war, when Brent climbed from $90 to $125. Since a large part of the harvest would fail in Ukraine, the price of wheat would probably increase by 30 per cent, maize by 20 per cent.
B – War and effective sanctions against Russia, the occupied part of Ukraine and Belarus by the US, EU, Australia, New Zealand Japan and South Korea. Oil increases in price to 135 dollars for a longer period. Corn and barley increase by 30 percent.
C – Sanctions also against China, which has already announced that it will support Russia. With the consequence of unforeseeable price shocks around the globe.
So much for a look into the crystal ball. We add: One scenario that is not yet on anyone’s radar is the possibility that some NATO countries will support Ukraine with troops on their own – the British, the Poles or the Baltic states, for example. Then things would get really dicey. Bernstein Bank keeps an eye on the matter for you!

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.

18.02.2022 – There has rarely been so much nervousness: Above all, the Ukraine crisis is tugging at investors’ nerves. But also the erratic statements from the Federal Reserve. Any piece of news can throw the market into turmoil.

Flight into the dollar possible

Both events could support the greenback. If the recent rate hike fantasies from the Fed become monetary policy and if the Ukraine crisis escalates, a flight to the dollar is quite possible. Since America will probably raise interest rates faster and more strongly than Europe, and since our continent is particularly dependent on Russian energy, the euro in particular should weaken against the dollar.

Source: Bernstein Bank GmbH

Hope for diplomacy

After the firefight between separatists and the Ukrainian army in the Donbass with mutual recriminations, Wall Street reset for the time being. After all, the White House has been warning of an imminent invasion for weeks. But then the U.S. State Department pulled the futures up again: According to it, Antony Blinken wants to meet with Russian Foreign Minister Sergei Lavrov next week.

The Stalinist Legacy

De facto, we see little possibility of a peaceful solution in Ukraine. This is because Russian President Vladimir Putin – largely unnoticed by the world press – has laid his cards openly on the table. During the visit of German Chancellor Olaf Scholz (SPD), Putin spoke of an imminent genocide against the Russian minority in Ukraine. He can hardly back down behind this line. The protection of Russians abroad is a reason of state, which makes an evil legacy of Stalin’s dictatorship dangerous.
Stalin had systematically settled Russians in occupied territories and made a large part of the domestic elite disappear in the Gulag. And this happened BEFORE the invasion of the Soviet Union by the Wehrmacht. This guilt is not discussed in Russia – and if there are organizations like Memorial, which do it, they are banned. Putin, too, sees the USSR only as a great savior of mankind from the Nazis; his own atrocities and the fears of small neighboring countries do not interest him.

The ethno-factor

Thus, today many Russians live in the Donbass, but also in Estonia, Latvia and Lithuania. These Russians often do not have passports from the host countries. They are de facto stateless and could persuade Moscow – as perhaps now in Ukraine – to invade. Especially since the Russian Duma has just demanded recognition of the People’s Republics.
For Putin, anything less than a separation of the Lugansk and Donetsk regions, where war has been raging for years anyway, would be a bitter loss of face. Then he would also have a new buffer against NATO. Who knows: Maybe the West will sacrifice Ukraine and force the country to “voluntarily” cede the ethnic Russian territories. Then Putin would have protected his countrymen, avoided an expensive war. Russia can point out that the West has always supported the independence of the small, non-Russian Soviet states. The stock market would celebrate.

Loose Cannon

That leaves us with a look at the Fed. Jim Bullard is causing panic like a cannon that has broken loose from its ropes and is rolling around uncontrollably. The St. Louis Fed chief just warned at a Columbia University event that inflation could spiral out of control – and advised a full percentage point rate hike in July. Ergo, Higthech stocks in particular dove.
Bullard stressed the core PCE – that is, the core rate of personal consumption expenditures that the Fed pays particular attention to – “does not have the reputation of coming down naturally.” He said the Fed needs to sell long-dated U.S. bonds to bring rates up at the long end. Jim Bullard warned earlier that the Fed risks its credibility if it doesn’t take decisive action against inflation.
Who knows what the weekend will bring. Bernstein Bank advises caution in the current situation – anything is possible and the opposite of everything.

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.

15.02.2022 – Goldman Sachs is betting on gold: In the opinion of the investment bank, the precious metal, together with oil, is the best hedge against geopolitical risks. But interestingly, the gold men also see gold as a hedge in times of rising interest rates. Which contradicts the prevailing doctrine.

Price target 2150

Based on the expected slowdown in the U.S. economy and the rise of recession fears, gold ETFs are likely to increase their gold holdings by 300 tons by the end of 2022, Goldman explained. Further, the Wall Street experts predicted a 10 percent increase in nominal GDP in emerging markets. All this points to a gold price of 2,150 dollars per ounce on a twelve-month horizon; the gold men see the six-month target at 2050 dollars. From the current price at a good 1850 dollars, this is not much – but respectable, if the stock markets should really crash.

Source: Bernstein Bank GmbH

The investment bank’s first argument in favor of gold sounds conclusive: The metal serves as a currency of last resort in times of crisis, judged Jeffrey Currie, head of commodities research. For example, he said, the price of gold rose after Sept. 11 and the Gulf War in 2003. However, gold did not respond to the annexation of Crimea in 2014. In general, he said, crises involving the U.S. had a greater effect on the price of gold. We think: Even if the Ukraine panic should probably ease for the time being after the Russian partial withdrawal, the danger is not over yet.

Threat of recession

There remains the issue of interest rate fears. “A common concern for gold in 2022 is looming Fed hikes and the potential for higher long term real rates,” Currie acknowledged. However, he said, it is historically the case that gold rises in price during periods of rate hikes. Gold is also currently showing resistance to rising yields on 10-year U.S. Treasury bonds. Goldman explained this paradox with fears of a recession. “This means if inflation fails to slow down in the second half of 2022 and the Fed is forced to hike more than currently expected, gold should be resilient as this would increase fears of a potential recession.” Normally, high interest rates are poison for gold, as interest-bearing investments are then more attractive – because the metal does not yield a return and, in addition, renting a safe deposit box or having one’s own safe first costs money.

And this closes the circle between inflation and geopolitical risks: The ongoing energy crisis and inflation already above the Federal Reserve’s target, he said, lead to concerns that a disruption in commodity flows from Russia will lead to overshooting inflation and a hard landing. Which would directly affect the U.S.

Risk aversion

And how does the new competitor, bitcoin, affect gold? According to Currie, “Gold is a risk-off inflation hedge, bitcoin a risk-on inflation hedge. (…) It is important to remember that risk-aversion is a major driver of investment interest in gold vs assets such as equities and, to an even greater extent vs bitcoin.” So if you want to hedge your portfolio against weakening growth and falling asset valuations, you should take a long position in gold, according to Goldman. Bernstein Bank wishes successful trades and investments!

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.

14.02.2022 – Warnings from the West are intensifying: an invasion of Ukraine is said to be imminent. Panic is likely to rage in the event of an attack.

“While the news flow surrounding Russia and Ukraine appears increasingly worrying, in reality any outcome and the impact are close to impossible to forecast,” commented portfolio manager Marcus Morris-Eyton of Allianz Global Investors. We suspect that in a worst-case scenario, prices would test the lows from the Corona crash. A lot of downside air, as the weekly chart of the Dow Jones shows.

Source: Bernstein Bank GmbH

Moscow stresses that it does not want an invasion of Ukraine under any circumstances. Moreover, Russian Foreign Minister Sergei Lavrov just calmed nerves when he answered a question from his boss Vladimir Putin in front of running cameras that there was a chance of an agreement with NATO and the US. Futures rallied; only to dive right back after a hawkish word from the Fed. The stock market is really not for the faint-hearted at the moment.

Pincer grip
But the West warns that Ukraine is encircled from three sides: In the north, Russian troops and the Belarusian army are in Belarus; in the east, Russian units are waiting on the border with Ukraine; in the south, the Russian army is said to have massed in Crimea and naval units in the Black Sea. As we have already suspected here, Russia could cut off the regions of Donetsk and Lugansk. Or immediately draw a belt in the south to create the new vassal state of Novorossia. In no time at all, about a third of Ukraine would have disappeared.

Home to the Empire
The conflict would have further possible stages of escalation: Who is to stop Vladimir Putin from drawing a corridor through Estonia, Latvia and Lithuania in the Baltic to connect the Kaliningrad/Königsberg enclave to the homeland? The weak West would cackle a little, form commissions, differentiate and kowtow at the end. Such a step would be the end of NATO – but this association is hopelessly divided anyway, since it includes appeasers who do not value armaments (Germany, Spain, Italy, etc.); furthermore, nations that are ready to defend themselves (Poland, Great Britain, USA). And who knows whether the combat-ready states will not rush to Ukraine’s aid. Then the question of a third world war would arise.

Double crisis
In any case, the blog GoldFix warned of a double crisis in Ukraine: on the one hand, a war would endanger the very existence of the European Union. The blog’s advice:
1. sell the euro
2. sell all Euro bonds to buy German Bunds, sell Euro Bonds in general
3. buy the dollar
4. buy gold- Europe more gold oriented than US and will buy it with dollars and Yen
5. sell global stocks
6. buy the yen
7. buy US bonds
8. buy eurodollars
9. sell the ruble
10. buy grains. Wheat for sure

Oil, Gold, Palladium
Second, there is a deepening international crisis beyond Europe. GoldFix’s advice:
1. buy oil- obvious
2. buy US Nat Gas- because global prices will rise and US gas might be exported… silly but people do it
3. sell stocks
4. buy gold
5. buy dollars and US bonds
6. buy yen
7. buy heating oil- it’s basically jet fuel

The blog also pointed to palladium – Russia is a bigger player in the market. Our conclusion: we hope the matter will blow over. Bernstein Bank is keeping an eye on the issue for you!

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.

10.02.2022 – A rumour is pulling Wall Street up. JP Morgan spread the word that the official US inflation rate will be much milder than expected. In other words: the figures will probably be fudged. For traders, it will be exciting on Thursday afternoon, from 2.30 p.m. we will know what the next move will be – then the new Consumer Price Index (CPI) will be on the table.

The forecast for the CPI stands at 7.2 per cent. If the inflation rate is actually below that and thus confirms the floor whispers, then we will probably see a short-term bull market. Especially since the head of the Federal Reserve in Cleveland, Loretta J. Mester, also poured gasoline on the fire. She said “long-run inflation expectations are still well anchored”. Hear, hear, that sounds like the now long-cancelled statement that the Fed sees inflation only as a transitory phenomenon. With this, a sharp tapering suddenly seems to be called into question.
The result: bonds, equities, crude, copper, cryptos – everything headed north. The situation in the Nasdaq 100 is particularly interesting – here a triangle has formed in the daily chart, soon it will be up or down; the index is also a little below the red 50-day line, which should actually magically attract prices. Especially as the MACD in the picture below still has some room to rise. Since growth stocks react particularly strongly to waning interest rate fantasies, the best trades should be possible here.

Source: Bernstein Bank GmbH

Revision every two years
This brings us to the fundamental news. It is a fact that Joe Biden’s ratings have meanwhile dipped in mirror image to the inflation rate. It is also a fact that the Bureau of Labor Statistics (BLS) actually revises the CPI every two years. The last time the data from the Consumer Expenditure Survey was refreshed was in January 2020. Now, for the first time, figures from 2019 to 2020 will be included; prices from 2017 to 2018 will be dropped. In other words, the basis for comparison will be raised because more goods will be included that have already become more expensive in the recent past. And thus the percentage jump compared to today will probably be less dramatic.

Reweighting of prices
In addition, the index will be remeasured. A small example: according to the OLS, teaching materials for schools will receive 0.2 per cent more weight; but the share of rent will drop by 0.3 per cent. Do you notice anything? A good that not everyone needs and therefore hardly notices is weighted more heavily; exploding rent costs, which affect quite a few, are adjusted downwards. In addition, as always in January, seasonal factors are included – and this is pure numbers voodoo. The financial blog ZeroHedge scoffed that the labour market figures had also been tricked with a magical “seasonal adjustment”.
The matter is certainly a factor for traders. The Economics team at Goldman Sachs, at any rate, pointed out yesterday that the topic has reached its own clients: “ahead of tomorrow’s CPI release, many clients have asked how the biennial change in category weights and annual seasonal factor update will affect inflation in January and the remainder of 2022.”

Megasqueeze
With all these considerations, Wall Street has done a 180-degree about-face. Whereas just a few days ago there was talk of an “Endgame”, now there is talk of a mega-shortsqueeze. Another team at Goldman Sachs, for example, just noted that short sales at hedge funds are outpacing long buys by 2.7 to 1 in dollar terms year over year. On GS Prime, it said short sales have risen for six straight weeks, with short flow since New Year’s Eve the highest in ten years. North America is the most shorted region at 81 per cent, it said. Liz Ann Sonders, Chief Investment Officer at Schwab, therefore also sees a reduced risk to the downside.
Our conclusion: We see a high chance that the figures are being fudged for political reasons. However, you never know. Those who want to trade the matter and assume that the prices will shoot vertically up or down should consider a straddle, i.e. a combination of put and call with tight stops. Bernstein Bank wishes you good luck!

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.

09.02.2022 – A bouquet of positive news for the cryptos – BTC has worked its way up out of its downward channel. We shed light on the interesting chart technique. And we analyse the bullish news of the past few days.

As you can easily see, Bitcoin has worked its way back up from the downward channel it has been in since November. Now BTC is knocking on the red 50-day line at just under 44,000 dollars. This resistance had better fall quickly. On the positive side for the bulls, the large chart gap from July 2021 was closed with the recent pullback to just under $33,000. However, a small gap has formed again in recent days, reaching to around 41,000. It is quite possible that the market will close this gap for the time being. Let’s now take a look at the latest news.

Source: Bernstein Bank GmbH

Payment on Block

First, Bitcoin Magazine reported a push factor from Jack Dorsey, ex-head of Twitter and current ruler of the payment platform Block. According to this, his users of the Cash app will be able to make free bitcoin payments via the Lighting network in the future. This is made possible by the Lightning Development Kit (LDK), a software application for developers. We think: More companies are likely to follow. By the way, Dorsey predicted that Bitcoin will replace the dollar by the end of 2021. We are curious.

Moscow points out payment system to China

The always bullish “Bitcoin Magazine” made another interesting assumption from the crypto world. According to this, the Russian-Chinese closing of ranks for the opening of the Winter Olympics could also mean that both superpowers will rely more on e-currencies in the future to circumvent sanctions by the West. Moscow could be kicked out of the SWIFT payment system by the West if it invades Ukraine.

In a letter to the Chinese people, Russia’s President Vladimir Putin explicitly referred to a joint agreement on payment processing dating back to 2019. Further, Putin assured that his country will support China in energy production – a big issue for mining cryptos. We think: It is quite conceivable that Moscow and Beijing will switch to Bitcoin, Ether and co. in the event of sanctions. But only as long as they do not have their own state-controlled cyber currencies.

Tesla and KPMB rely on cryptos

That leaves a newsflash from Tesla: the e-car pioneer is firmly committed to Bitcoin. The company has now accumulated tokens worth around 2 billion on its balance sheet. Ergo, Tesla has not sold anything, which many had feared. This was joined by news from Canada: the auditor there, KPMG, announced that it had invested in Bitcoin and Ether; however, the company did not give any details about the amount.

Bitcoin loot confiscated

Last but not least, let’s move on to a factor that is not yet clear whether it supports the bulls or the bears. The US Department of Justice just reported the largest financial seizure ever – according to the report, the FBI confiscated the loot from a hack against crypto platform Bitfinex from August 2016. The criminals turned part of the stolen goods of 120,000 tokens into cash; however, 94,000 tokens are still said to be left. You can imagine what the state is doing with them: selling them.

Unfortunately, it is unclear when the e-currencies were confiscated and what happened or is supposed to happen to them. Since the thieving couple was arrested in Manhattan this Monday, it seems that the access to the e-accounts has just run its course. If the tokens are thrown on the market shortly, a new torture for BTC cops will begin. However, if the loot has already been hawked, or if it is not thrown on the market at all, a major drag on BTC would disappear from the market. Bernstein Bank is keeping an eye on developments for you – we wish you successful trades and investments!

Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.