Good morning, everybody. This is Martina’s Corner at Jores Capital on Thursday, September 1st, 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 moves the markets and the world.
US inflation in July has come down from its 41 year high, but has gone up 8,5% compared to July 2021. Consumers hope that we have reached a peak. The consumer confidence index, which is an indicator of how people perceive the economy and their own future related to it, was up to 145,4 in July from 139,7 in June. Sentiment had a negative performance in the 3 months previously as people had to digest the impact of the Ukraine war, high inflation, high gas prices, high electricity prices and a sliding stock market.
Yet inflation has been at 4% and higher for the last 2 years already, and got worse progressively, mainly as a result of the huge cash supply to consumers during the COVID year 2020.
Steve Hanke, professor for economics at John Hopkins University said in an interview that he observes that we see 5 months of zero M2 growth. What does that mean? The M2 indicates the growth-money supply and includes cash, checking and savings accounts as well as shares in mutual retail money funds (so money that’s very easily available) which he sees as a clear indicator for slipping into a recession in 2023.
Yet, Warren Buffett’s business partner, Charlie Munger, does not get too impressed by inflation and emphasizes that he’s over 90 years old and has seen many inflations in his life, so investors should stay calm. Buffett himself speaks out in favor of such businesses whose product will be in demand regardless of their price like Coca-Cola (people will always drink Coca-Cola) and stresses that if one keeps the money under the matrass, it will for sure lose value.
Amongst a lot of uncertainty, the Dow Jones, S&P500 and the Nasdaq closed the month of August with a loss. The Dow Jones at a minus of 0.88%, the S&P500 minus 0.78% and the Nasdaq minus 0.12%, recovering to plus 0.54 in the afterhours. So, what’s the market outlook for the day. At 11.50pm Eastern time, 5.50 CET the market is sliding again with the Dow Jones Future trading at minus 0.47%, 149 points down, the S&P500 future at minus 0,27% and the Nasdaq future being 1.16%, 143 points weaker.
Also Europe closed weaker on the last trading day in August with the DAX closing at a 126 point, 0.97% loss, the IBEX closed on a loss of 1.17%, minus 97 points and the FTSE closed at minus 1.05%, minus 77 points.
At the moment markets look weaker again, with the DAX Future trading at a minus of 0.71%, 92 points down, and the FTSE trading minus 0,39% , 27 points lower.
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