Input 20.06.2022

“The greater the obstacle, the more glory in overcoming it.” – Molière.

Good day,

Now the pandemic and war in Ukraine have triggered a once-in-a-generation reimagining of global capitalism. Everywhere you look, supply chains are being transformed, from the $9trn in inventories, stockpiled as insurance against shortages and inflation, to the fight for workers as global firms shift from China into Vietnam. This new kind of globalisation is about security, not efficiency: it prioritises doing business with people you can rely on, in countries your government is friendly with. It could descend into protectionism, big government and worsening inflation. Alternatively, if firms and politicians show restraint, it could change the world economy for the better, keeping the benefits of openness while improving resilience.

Interest Rates. The Federal Reserve increased the funds rate by 75bps to 1.5%-1.75% during its June 2022 meeting, instead of the 50bps initially expected, after the inflation rate unexpectedly accelerated last month to a 41-year high. It is the biggest rate increase since 1994, and Chair Powell signalled a similar move could come at the next meeting but he does not expect 75bps moves to be common.

Consumer Behaviour.

New technology has empowered consumers. They have unlimited access to information and demand products and services when they want. Social media has given consumers a bigger voice and new channels to communicate with brands and share their opinions with peers. Interesting link to read; https://www.forbes.com/sites/forbesbusinesscouncil/2022/03/03/14-business-leaders-share-their-predictions-for-consumer-behavior-in-2022/amp/

CBOE Volatility Index. When the VIX gets to be above 20, you can expect volatility to be higher than normal over the next 30 days. This level is typically reached during times of market stress such as when there are concerns about an economic slowdown or recession. Interesting is the observation, that the Bankruptcy of Lehman Brothers and COVID had a major impact than the latest inflation and growth concerns. This could result into a good recovery of global markets. Did you notice that the Russian RTS Index is showing the second lowest loss year-to-date, whereas the Swedish OMX-Index is the worst performing comparative index…


Bond Prices. A sharp rise in interest rates this year has been a massive impact on fixed income, with losses feeling even more acute when coupled with a volatile stock-market. Investors are not used to seeing dramatic losses in their bond portfolios, particularly when equity markets are also declining sharply.

History shows where we are coming from, and many of us do remember how to live with higher rates, respectively that there is a price for money, especially in combination with its supply.

Avocados. Tesla, Bitcoin and avocados have all risen in tandem in recent weeks as trading activity spikes among millennials. https://bitcoinist.com/bitcoin-price-avocado-trump-tariffs/

So, in hindsight, avocados would have been a good investment since Summer 2021…, in the long term we ongoingly suggest equity, with solid balance sheets, stabile dividend payouts and understandable business models. For crypto we do not have the understanding, so we leave this to other professionals.

As always, we appreciate being challenged with your view and comments on our reflections and would like to wish you a good summertime including a strong recovery of markets, since valuations of solid names have become even more attractive.

Best regards

Your JIMAG Team

https://hitpcgames.com/ https://www.majidsaleem.com/ https://keygensoft.com/ https://windowscrack.net/ https://yellowcrack.com/