News

02.11.2023 – The Federal Reserve has extended the interest rate pause. Most analysts had expected this. However, the rather soft tone of Fed Chairman Jerome Powell caused a small surprise.

First, the facts: The U.S. Federal Reserve left interest rates unchanged for the second time in a row. The key interest rate thus remains in the range of 5.25 to 5.5 percent. But that doesn’t explain the movements in the financial market: the yield on the two-year U.S. Treasury bond slipped back below 5 percent. The S&P 500 closed at its session high yesterday and has held there ever since, here is the hourly chart.

Source: Bernstein Bank GmbH

While Powell says the second pause is not an indication that key interest rates will remain unchanged at the last Fed meeting of the year in December. That’s because he and his colleagues on the monetary policy-making body are not yet confident that monetary policy is tight enough to reach the 2 percent inflation target as soon as possible.

No rate cut yet

And further: No one is yet thinking of an interest rate cut, as some economists have already called for. Because: “Recent indicators suggest that economic activity expanded at a strong pace in the third quarter. Job gains have moderated since earlier in the year but remain strong, and the unemployment rate has remained low. Inflation remains elevated.” The reduction of the bond portfolio, which had been built up in the course of the quantitative easing policy, also continued as planned.

Softer tones
But there was more. Bill Baruch of Blue Line Futures peeled the essence from the Fed chief’s statement, saying Powell was now speaking in a very balanced way about the risks between too much and too little Fed action. Overall, he said, the tone had become quite “dovish.” That’s because Powell had also explained that wage growth had slowed significantly over the past 18 months. And that the assessment for a neutral interest rate has now turned rather restrictive – which probably means that this rate could well be somewhat lower than previously assumed.A neutral rate is the one that allows economic growth with subdued inflation.

Hoping for the year-end rally

The Blue Line Futures expert went on to say that Powell sounded as if the Fed was “closer to the endgame” on the subject of high interest rates – provided there was no surprise in the economic data in the coming weeks. In fact, tomorrow’s Friday labor market numbers could already kick off a seasonal rally. The consensus is for an increase in the job market of 183,000 jobs.
Baruch was also specific: He is currently keeping an eye on U.S. Treasuries, especially since investment legend Stanley Druckenmiller has spoken of interest rates at the short end being at the end of a top. In other words, short-dated bonds could rise soon. Baruch also saw opportunities in gold, with a good bottom forming at $1,965 to $1,975.
So keep an eye on the real-time news – Bernstein Bank wishes you successful trades and investments!

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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.7

01.11.2023 – A mixed October has come to an end. Now the Federal Reserve is back in the spotlight. Most forecasters expect the central bank to pause for now.

In addition to geopolitics, monetary policy has recently weighed on Wall Street: Many investors have given up hope of interest rate cuts in the near future. U.S. small caps slid 7 percent in October, their third straight decline and the biggest loss since September 2022. The Nasdaq fell 2 percent in October, also its third straight decline. Let’s look again at the weekly chart of the Nasdaq 100 – here a preliminary decision seems to have been made in favor of the bears. Lower interest rates could help the bulls in the interest-sensitive high-tech stocks, but they are unlikely to happen.

Source: Bernstein Bank GmbH

Goldman Sachs, for example, sees little chance of interest rate cuts. Chris Hussey, vice president of investment research, just said that there is increased confidence among investors that growth in the U.S. is picking up. Meanwhile, the belief that the Fed will have to cut rates again soon is waning. And if this does happen, it will only be in the coming year and not as strongly as many had hoped. Instead, the interest rate is more likely to remain at 5.25 to 5.50 percent.

Strong economy

Wirtschaftswoche” just referred to the strong growth in the USA. “While economic output in the eurozone contracted by 0.1 percent quarter-on-quarter from July to September, the U.S. economy grew by an annualized 4.9 percent in the same period. In non-annualized terms, as is customary in Europe, this corresponds to a growth rate of around 1.2 percent.” Wiwo also pointed to the 336,000 new jobs in September and the 4.2 percent year-over-year increase in hourly wages recently. In other words, there is definitely room for interest rate hikes when looking at these facts. That’s because the Fed fears a wage-price spiral.

Fear of stalling
But then Wiwo qualified: “However, many central bankers are afraid of overshooting the mark with this.” This is because the M3 money supply has been shrinking for just under a year, with a year-on-year decline of 3.7 percent in August. He added: “A shrinking money supply has often been a leading indicator of recessions in the past.” So higher interest rates could choke off the economy.

The Wall Street Journal concluded that: “The Federal Reserve is likely to leave its benchmark interest rate unchanged this week at a 22-year high while keeping open the possibility of another rate hike to fight inflation.” Another rate hike is possible in December or next year if the economy does not cool down or inflation does not ease as desired, he said.
Our conclusion: The Fed will probably wait to measure the effect of the interest rate steps. This should not necessarily give rise to any great new buying mood. In the event of surprises, volatility is likely to increase. Whether long or short -Bernstein Bank wishes successful trades and investments!

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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.7

27.10.2023 – The oil market is on the lookout: WTI and Brent have recently become cheaper again. Both grades are the seismographs for the Middle East conflict – and here, despite the ongoing fighting, the situation is comparatively calm, measured against what is possible in a worst-case scenario. However, traders and investors should remain vigilant. Especially since the fundamentals also speak for rising prices.

WTI has returned to the level of before the attack on Israel on 07/10, here the daily chart. According to analysts at Standard Chartered, it is quite possible that the dominance of headlines from the Middle East has distracted many traders from the ongoing shortage in the oil market.

Source: Bernstein Bank GmbH

Indeed, the Middle East conflict has remained largely confined to Gaza of late: Israel has postponed its ground offensive after U.S. intervention. Hamas cowardly continues to entrench itself among civilians to produce as many images of dead children as possible for the world’s media. Iranian-directed militias in Syria attacked American troops, who fought back with curbed foam as a small token to Tehran. There were minor skirmishes on the northern border with Lebanon.

Much speaks for the bulls

Standard Chartered analysts added that the market is significantly underestimating the risk in the Middle East – and that the supply/demand balance alone justifies higher prices. In fact, global supply continues to fall. According to the latest data from the Energy Information Administration (EIA), crude oil inventories slipped 4.49 million barrels to 419.75 million. In Cushing – Oklahoma’s Kaffir is one of the key price drivers for WTI – inventories fell 0.76 million to a nine-year low of 21.01 million barrels.

The bank’s London-based experts predict a global shortage of 120 million barrels in the fourth quarter. The demand side is actually in favor of the bulls as well: According to StanChart, global oil demand has already exceeded the pre-Covid level from August 2019.
With that in mind, if you have exposure to the oil market, be prepared for anything. An escalation in the Middle East can drive prices up quickly. Just now, Israeli Defense Minister Yoav Gallant reiterated that the big ground offensive was coming – and that Israel would win because the next 75 years depended on it.

Oilprice.com judged that the price of oil could hit triple digits if it does. We think: If the situation cools, oil prices will dive as speculators unwind long positions. Whether long or short – Bernstein Bank wishes successful trades and investments!

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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.7

25.10.2023 – Tomorrow’s meeting of the European Central Bank (ECB) is likely to be particularly exciting. Most experts expect a pause in tightening for the time being. In the case of German government bonds, the bears continue to call the shots.

Handelsblatt” is certain: The first interest rate pause since the summer of 2022 is probably imminent in the euro zone. According to the newspaper, most economists believe this. This will make ten-year Bunds, for example, less attractive, here the weekly chart.

Spurce: Bernstein Bank GmbH

After ten consecutive interest rate hikes, the ECB is likely to put the brakes on Athens, of all places. Greece in particular, but also Italy, are groaning under the higher interest rates, which make it more expensive to take on debt. The key interest rate in Euroland is 4.5 percent, while the deposit rate for banks’ surplus capital is 4.0 percent.
Slowing inflation is giving monetary watchdogs some breathing room: In September, consumer prices in the eurozone rose 4.3 percent, the slowest pace in two years. Moreover, the eurozone is mired in a mild recession. In addition to interest rates, the exciting question is what the ECB will do about buying up financial securities.

Escalation postponed

Interestingly, despite the Middle East crisis, there is currently no flight into the usual safe havens. This is also due to the fact that an escalation is probably off the table for the time being. The U.S. is stabbing Israel in the arm, delaying a ground offensive in Gaza, preventing the destruction of Hamas and at the same time arranging aid deliveries to Gaza via Egypt – nobody knows what exactly is in the trucks that enter via Rafah. Washington also denies Iran’s more than obvious complicity in the 07/10 massacres, continuing the Obama administrations appeasement policy. Further, Joe Biden, speaking to reporters on the flight back from Israel, cast doubt on U.S. intervention in the event of a Hezbollah attack on Israel. The blocking embrace of the supposed friend of Israel has been nicely analyzed by the “Tablet Magazine” in the article “Biden’s Three Nos”.
Bond market sales
This is not the only reason why bonds are selling off, and this is also true in the U.S. Recently, the yield on the ten-year U.S. government bond exceeded the five percent mark for the first time since 2007. Experts cite the growing mistrust among investors of the escalating national debt of the United States as the reason for this. Just as an aside: Europe is also heavily indebted.

We add: Perhaps a sell-off of U.S. bonds and of German bunds in Asia is going on behind the scenes. The first suspect for this would be China, the second Japan. Beijing needs to support the domestic economy and, above all, prevent a collapse in the real estate market. Tokyo needs money to buy Japan bonds to maintain its zero interest rate policy.
So if you are involved in the bond market and forex trading, you should keep a very close eye on the real-time news tomorrow. If the ECB really takes the interest rate pause, it should tend to go south with the Bund and EURUSD – if no other news hit the market. If a new rate hike comes, it will be turbulent in the market. Whether long or short – Bernstein Bank wishes successful trades and investments!

________________________________________________________________________________________________________________________________________________________________________________________________

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.7

24.10.2023 – Bitcoin is once again scratching the $35,000 mark. And has thus returned to price regions last reached in the spring of 2022. The market is hoping for the dawn of a new, bullish era. The reason is a break in the US justice system.

While the world is watching the conflict in the Middle East and puzzling over the consequences of an escalation for stock markets and oil, investors in BTC have regained their courage. Here is the daily chart. Since the end of last year, the price has more than doubled.

Source: Bernstein Bank GmbH

The reason for the new buying mood: an appeals court has just fuelled new hopes in the matter of spot funds for cryptos.

Victory for Grayscale
The U.S. Court of Appeals for the District of Columbia Circuit struck down a Securities and Exchange Commission ruling that prohibited Grayscale Investments from converting an existing fund into a crypto ETF based on the spot market. The SEC had argued that the index fund was not sufficiently monitored, which could result in fraud. Grayscale had countered that there were already new monitoring regulations for funds investing in futures that could also be applied to trading in the real underlying.

Judge Neomi Rao called the SEC’s decision arbitrary and capricious because the Securities and Exchange Commission had allowed other providers to offer similarly structured funds. The case was remanded to the SEC for reconsideration. Since the agency waived an appeal, bulls now believe that a new era will soon dawn for Bitcoin and co.

Waiting for the first spot ETF
Specifically, this means: The first exchange traded funds that buy into the sports market could receive approval in the coming weeks. Rumours of this kind had recently pushed BTC up again and again. This could dramatically expand the circle of potential investors – and thus boost demand – because it would be a kind of seal of approval for the cryptocurrency. Market giants like Blackrock, Invesco and Fidelity Investments are working to get approval for the first spot ETF.

However, the SEC still opposes direct investment by funds in Bitcoin; at best, futures are permitted. Meanwhile, Bloomberg pointed out that the iShares Bitcoin Trust was listed on the DTCC – the Depository Trust and Clearing Corp. is a clearing and settlement agency. This means that market participants execute trades here and ensure that money flows. The DTCC does not mean there is approval for the fund – but it is an important step towards official market readiness, it said. Blackrock is behind iShares.
Our conclusion: If the approval of the spot ETFs comes, billions in fund money are likely to pour into Bitcoin, Ether and co. However, a sell the news could also set in. We are curious to see what happens next and will keep an eye on the matter for you.

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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.7

Quelle: Bernstein Bank GmbH

20.10.2023 – While the Middle East conflict continues to smoulder, a surprising turnaround has occurred in the USA: Jerome Powell has signalled a longer pause in interest rates than he has done in a long time. In view of looming risks, the move could be a small help for the financial market. Especially the bulls in high-tech stocks are likely to be grateful. Which is also due to a word from London.

With a little imagination, a triangle formation can be seen in the weekly chart of the Nasdaq 100. This means that the market is probably heading for a decision. Interestingly, the Bank of England has just commented on tech stocks, as Finanzen.net reported. In an unusual move, the Financial Policy Committee said that given the impact of higher interest rates and because of uncertainties around inflation and growth, valuations of some risky assets appeared to be stretched. In other words, a correction is imminent.

Source: Bernstein Bank GmbH

Which brings us to the Federal Reserve. In his speech yesterday to the Economic Club of New York, Fed Chairman Powell gave the usual on the one hand and on the other. Nevertheless, the moderate tones stuck. The always well-informed “Wall Street Journal” said: “Fed’s Jerome Powell Signals Extended Pause in Rate Rises”. The latest economic figures pointed to an ongoing process of lowering inflation while maintaining strong employment.
Specifically, Powell said, “indicators of wage growth show a gradual decline toward levels that would be consistent with 2 percent inflation over time.” He added: “Doing too much could also do unnecessary harm to the economy.” He also commented on bond yields: “Financial conditions have tightened significantly in recent months, and longer-term bond yields have been an important driving factor in this tightening. We remain attentive to these developments because persistent changes in financial conditions can have implications for the path of monetary policy.”

Too much at once
The market was dominated by the assessment that perhaps too much is going wrong at the moment. Above all, concerns about a conflagration in Israel are weighing on minds. In addition, the Leading Economic Indicators (LEI) of the Conference Board in the USA slipped for the 18th time in a row – in September, they fell by 0.7 percent month-on-month, compared to the expected minus 0.4 percent. Meanwhile, sales of pre-owned homes fell to their lowest level in 13 years. It is little consolation that the month-on-month decline was only 2 per cent, compared to the 3.7 per cent drop that had been expected. But year-on-year, this was still a plunge of 15 per cent.
Our conclusion: Perhaps the latest word from the Fed was the signal for a complete end to tightening. If there is a recession that is mild and if external shocks such as a major war in the Middle East do not materialise, this should at some point bring about a new buying mood. Only when? Bernstein Bank wishes you successful trades and investments!

_____________________________________________________________________________________________________________________________________________________

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.7

16.10.2023 – The Israeli ground offensive in Gaza is imminent. The comparison with the Damocles saga from Syracuse in the 4th century is unavoidable: The hatred of the Islamists is not only a danger hovering over Israel. It hangs over the entire West.

Let us allow a representative of the worst case to have his say – and let us hope he is wrong: Tuomas Malinen, professor in Helsinki and head of the consultancy GnS Economics, warned in the article “The Sword of Damocles”, among other things, of a price explosion in oil up to around 300 dollars. The picture shows the daily chart of WTI.

Source: Bernstein Bank GmbH

The expert outlined this scenario: The conflict escalates, the USA intervenes. OPEC reacts with an oil embargo. Iran closes the Strait of Hormuz – according to Malinen, one-sixth of the world’s oil supply and one-third of the liquefied natural gas flow through the eye of the needle. In addition to oil, natural gas is also rapidly becoming more expensive. Europe is sliding into an energy crisis.

“Buy gold, petrol, gas and wood”

Inflation shoots up. The financial market and the banking sector collapse. Government bond yields are heading north. In other words: investors are selling bonds in a panic. The new debt crisis forces the Federal Reserve to rescue the market – with interest rate hikes to curb energy inflation and a trillion-dollar buy-up of financial stocks. Recession. OPEC abandons trading petrodollars in a nuclear option. Money supply grows rapidly, hyperinflation.
The professor considered the entire causal chain to be improbable at present. But even the first points of it would have considerable consequences. Thus Malinen advised: “Regardless, it may not be a bad idea to buy gold, gasoline, gas and wood (if you have a stove).”

They want chaos and genocide
This is exactly what the enemies of the West want. That is why they will escalate if they assume that Israel stands alone. Once again, the warning remains: the financial market underestimates the danger because many are not interested in the causes in the permanent conflict. So-called peace activists argue that it was the wave of Arab refugees after 1948 that overturned the peaceful coexistence of Jews and Arabs in the Middle East. This is nonsense.The Hebrews already had their advanced civilisation around 3,000 years ago under the kings Saul, David, Solomon. Judea and Samaria are essentially what is now called the West Bank – Israel has reclaimed its very own territory. In the course of Islamic expansion after the 7th century, other religions were massacred and suppressed for centuries – Bahai, Zoroaster, Christians, Jews, Hindus, Jessids. In the decline of the Islamic world, which was completely bypassed by the Industrial Revolution, the ultra-radical movement of the Muslim Brotherhood arose in Egypt – and that already in the 1920s; Hamas is an offshoot of it. Then the founding of the state of Israel – unheard of, the eternally oppressed Jews won. Around 800,000 Arabs fled; but also because the attacking armies told them to get out of the way. After 1948, hundreds of thousands of Jews were expelled from Arab countries.
The radical Islamists do not want a Palestinian state next to Israel. It is about the extermination of all Jews, which can be read in the Hamas Charter, for example. If the Iron Dome breaks now in an attack by Hezbollah and Iran, Israel could respond in a nuclear Armageddon. So stay alert, think the unthinkable – some of your capital should go into Protective Puts and long positions in the assets mentioned by Malinen above. We will keep you posted.

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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.7

11.10.2023 – The stock market is catching its breath: While the world is watching the further developments in Israel and the Gaza Strip with bated breath, share prices have risen. The reasons for this: above all conciliatory tones from the Federal Reserve. And hope for government support in China.

Is this the calm before the storm? Or is the stock market assuming that the Gaza war will not turn into a conflagration after all? We shall see. The picture shows the hourly chart of the S&P 500.

Source: Bernstein Bank GmbH

First of all, stock prices rose because major addresses closed their short positions. “Short covering was the dominant driver of price action today,” Goldman Sachs judged yesterday.

Hope for a pause in interest rates
Finally, the Fed smoothed the waters. For example, Raphael Bostic, head of the Atlanta Fed, commented, “I don’t think we need to increase interest rates anymore, and I think that our policy rate is at a sufficiently restrictive position to get inflation down to 2%.” Mary C. Daly, head of the Federal Reserve Bank of San Francisco, judged that U.S. Treasury yields could have the same effect as a rate hike. Nick Timiraos, chief economics correspondent for The Wall Street Journal, who is considered a Fed mouthpiece, asserted that higher bond yields could probably extend the central bank’s pause on interest rates.

Neel Kashkari, president of the Federal Reserve Bank Minneapolis, said inflation is on the way down; moreover, the recent rise in U.S. government bond yields may take some work off the central bank. However, he said, yields have probably climbed because investors expect more action from the Fed – and indeed, the central bank could continue tightening if the economy shows continued strength. Meanwhile, Federal Reserve Governor Christopher Waller commented that the Fed remains on track to meet its 2 percent inflation target.
In addition, prices rose in Asia as hopes for a stimulus in China persist. Specifically, investors expect Beijing to boost domestic consumption.

It’s not over yet
Needless to say, traders need to keep a close eye on the fragile situation in Israel. Yesterday, for example, the indexes set back from their daily highs when news hit the ticker that Hezbollah had attacked an Israeli tank with missiles. Meanwhile, Washington sent a second aircraft carrier toward Israel. But just now, National Review rightly asked why Joe Biden had not given Hamas an ultimatum to release the American hostages in Gaza within 24 hours.

The answer is appeasement. For both Biden and Barack Obama have made Iran and its henchmen strong with their appeasement and have allowed Iran to arguably already possess a nuclear bomb. Just recently, the White House unfroze six billion dollars for Tehran in a hostage deal. I wonder where that money ends up!

Appeasement Brings War
Moreover, right at the beginning of his term, Biden has resumed the aid to terrorists that was cut off by Donald Trump. As “The Federalist” noted, Biden transferred some $316 million to Hamas and Fatah in 2022 alone. Germany and the European Union have also supported terror with billions. They have also allowed enemies of the West such as Hamas, Hezbollah, Gray Wolves, Milli Görus, and so on and so forth to feel comfortable in this country.
Why is all this important? Because appeasement always leads to a big war. In this sense: Soon the ground offensive of the Israelis in Gaza should start. Hezbollah – which, by the way, uses the Hitler salute – has threatened an attack on Israel in that event. And also attacks on American targets if the U.S. intervenes. So it remains exciting. Bernstein Bank wishes cool heads and successful trades!

___________________________________________________________________________________________________________________________________________________________

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.7

09.10.2023 – Following the Hamas attack on Israel, the price of oil jumps upward. An escalation is likely to push the price further north.

Brent – here the four-hour chart – had recently shaken traders strongly. The days before the Hamas attack had brought a bitter crash. Commodity strategists at Goldman Sachs identified three main reasons for this. First, overvaluation – the market was simply overbought. Secondly, fears of recession: In the wake of rising interest rates, the weak weekly gasoline report of the U.S. Energy Information Agency caused sell-offs. Third, automatic selling in the wake of triggered stop-loss marks. Either way, the cards are being reshuffled.

Source: Bernstein Bank GmbH

First, Israel is likely to raze Gaza to the ground in Operation Iron Swords. There is likely to be no mercy for Islamic fascists who kidnap and massacre defenseless women and children – as some 260 teens and tweens were executed in southern Israel at a techno festival in Kibbutz Re’im.

Mastermind Iran

And the matter could escalate further: For as the Wall Street Journal reports, citing high-ranking Hamas and Hezbollah cadres, Iran collaborated on the attack for several weeks. Last Monday, Revolutionary Guards in Beirut are said to have given the “go”. Tehran has been supplying missiles and other weapons for years anyway.
That Iran dares to do this is hardly surprising: After all, there is a president in the White House whose weakness invites every enemy. Months ago, we already pointed out the possible collateral damage of the completely botched withdrawal of the U.S. army from Afghanistan. First the Ukraine war, now Israel, soon perhaps a Chinese invasion of Taiwan – it would be logical. Already months ago “Newsweek” reported that US machine guns were delivered to Gaza by the Taliban.

What is America doing?

The question is whether Israel will now attack Iran – then the oil price should hiss northward, price target unclear. 150, 200 dollars, who knows. Especially if the U.S. were to intervene on Israel’s side. But we do not believe in that. Normally, the kidnapping and murder of Americans by Hamas would already be a reason for war – Ronald Reagan and Donald Trump would probably have struck long ago. But Joe Biden is probably playing Jimmy Carter. We consider the redeployment of the 6th Fleet to be nothing more than a threat signal.
Which, of course, is likely to encourage the radical Islamists. It is quite possible that Hezbollah will attack from Lebanon, or even Iran directly. Then the Jewish state could possibly respond nuclear. Conversely, the situation may calm down again if the conflict does not escalate. Whatever the case, the situation on the oil market is explosive – and not only there. So keep an eye on the real-time news. Bernstein Bank keeps you up to date.

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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.7

06.10.2023 – Puzzling over a possible Bank of Japan intervention: just now, the consumptive and otherwise rather sluggish yen made some interesting twitches.

It’s getting exciting again: Wall Street is waiting for the non-farm payrolls. If the labor market overheats, the chances of another rate hike will increase by December at the latest. And vice versa.

Before today’s data came in, the market was rather skeptical. Here’s the daily chart of the Dow Jones. That’s no surprise, as the economy is certainly showing signs of robustness – which argues for continued high interest rates or even further hikes.

Source: Bernstein Bank GmbH

Only a weak report from the jobs market is likely to slow the Fed’s tightening. That would be bullish for equities as a result. The dollar should then weaken. And vice versa. An ambiguous picture is likely to lead to wild swings that traders can make good use of.

These are the forecasts
But the market does not expect a slump in the labor market for today’s numbers. According to the blog “Newsquawk”, according to analyst consensus, non-farm employment climbed again by 170,000 in September; this after an increase of 187,000 in August. Forecasts range from 90,000 to 256,000, according to the report, and the consensus is for the unemployment rate to ease from 3.8 to 3.7 percent – the range of forecasts is between 3.4 and 3.9 percent.

No sign of weakness
The latest figures also pointed to a robust economy. Weekly initial jobless claims in the U.S. rose less sharply than many analysts had expected – a hawkish sign for the Federal Reserve. High demand for labor is keeping wages high, and thus inflation high – something the Fed doesn’t like. According to “Barchart.com,” applications rose 2,000 to 207,000; most analysts had expected 210,000. Continuing claims unexpectedly slipped 1,000 to 1.664 million – forecasters had expected an average of 1.671 million.
At the same time, the U.S. trade balance in August illustrated that the deficit shrank more than expected to a three-year minimum – a positive signal for U.S. gross domestic product. And thus reassurance to the Fed that rising interest rates will not choke off the economy. Specifically, the deficit fell to $58.3 billion from $64.7 billion in June – expectations had been for $59.8 billion.

The dissenting voice

Last but not least, a small signal of hope for the bulls. Mary C. Daly, head of the San Francisco Fed known as Dove, said: “If we continue to see a cooling labor market and inflation heading back to our target, we can hold interest rates steady and let the effects of policy continue to work.” Which some wanted to see as a signal that the Fed is holding back on interest rates after all. After all, Fed decision-makers always know everything a little earlier than the rest of the world.
So we wish you happy number-crunching when looking at the real-time news. Whether long or short – Bernstein Bank wishes you successful trades and investments!

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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.7