Podcast August 15th, 2022


Good morning, everybody. This is Martina’s Corner at Jores Capital on Monday, August 15th, 2022. Welcome to our program. We are giving you a short summary on market news, politics, economics and other world news and market outlook every Monday and Thursday.

Let’s see what moved last week and what are the outlooks into this week. There are voices that see the worst in energy prices already behind us, like Scott Ruesterholz at Insight Investment with assets of over one trillion, yet we observe that gas and electricity prices are a real concern in Europe, and not only because of the war in Ukraine. The drought does not make it any better as shippable rivers, like the Rhine, that are crucial for the supply chains may be unavailable soon.

Home prices still hit new records, although interest rates are going up and mortgages becoming more and more expensive with that. Real estate prices in the US were up 14.2% second quarter of 2022 compared with the same period last year. We believe that between more expensive mortgages and energy prices still being high, it may become difficult for most families to cover the cost. Especially in places where interest rates are not fixed when a mortgage is negotiated and interest rates are going up. This was a nasty surprise for many people during the financial crisis of 2008 and the years after and could be again. Just imagine you negotiate a mortgage at 3% and then interest rates go up to 6%, this means you’d pay double to the bank every month. If that was to happen, we would probably also see negative effects on the stock market.

More interesting new was that Elon Musk has put 7.9 million of his Tesla shares on the market. As it is said he is doing so as a reaction to the litigation with Twitter. This could be of two reasons: one to have liquidity in case of losing in the courts and then reason two, in order to protect and lower possibilities of negative reaction in the markets to the Tesla stock price, in case of losing the trial.

Today’s market outlook. The DAX closed at 13,795 points on Friday and looks slightly weaker today with 100 points, 0,71% down at 9.41am CET (3.41 Eastern Time). The Spanish IBEX at 13 points up and the London FTSE at 12 points up, so both almost unchanged. The NASDAQ futures are 70 points down in the premarket. The Dow Jones futures are 155 points weaker with a downwards trend at the moment.

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