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Week in Review: 12-16 September 2022

The past week:

The August consumer price index (CPI), a measure of price the inflation, has been released - higher that forecasted by the economists. This was the excuse for the end of the relief rally of the days 7-12 September. And the tumble was big (example: NASDAQ).

The markets are negative and bearish. Everybody talks about a recession in 2023 (we are already in one) and companies are releasing warnings regarding future earnings and firing employees...

Next week (Wednesday), the next FED rate hike will be announced, and the speech will be scrutinized by the investors in order to assess the hawkishness of the central bank.

Will we see more selling and price tumbling in stock markets? Maybe...


The Overall Macroeconomic Situation Reviewed


Video: Jim Rickards: A 2008-Style Liquidity Crisis + Recession Is The Big Threat Now

Channel: Wealthion



Video: Jim Rickards: 15% Inflation Ahead If Fed Pivots Too Soon

Channel: Wealthion



The Effect of Interest Rate Hikes and the Strength of the USD

Video: Hugh Hendry: The Fed Doesn't Know What It's Doing

Channel: Bloomberg Markets and Finance



Market Bubbles

Video: This Is By Far The Biggest Risk To The US Economy

Channel: Rebel Capitalist


 


OIL
 
 
WTI crude futures steadied near $85 per barrel on Friday but were still set to decline for the third straight week, as aggressive monetary tightening by major central banks and global recession fears dampened the demand outlook. A strong dollar also added downward pressure on energy prices as it makes commodities more expensive for buyers holding other currencies. Moreover, oil prices plummeted to below $81 on Thursday after the US Department of Energy backtracked previous reports that the US would restock its emergency reserves should WTI prices drop below $80, removing the potential price floor for oil. On the supply side, China is considering allowing more fuel exports, which could be a sign of weak domestic consumption. Several investment banks have issued a dire outlook, with Standard Chartered Plc saying the global oil market swung into a “large surplus” this quarter, while Morgan Stanley and UBS Group AG slashed near-term forecasts on recession fears, Bloomberg reported.




Natural Gas
 

US natural gas futures extended their decline to below $7.8/MMBtu, more than erasing the sharp gains from the start of the week as US railroads and labor unions reached an agreement to avert a rail shutdown that would hit energy supplies across the country. The previous threat of a rail strike sent natural gas prices close to the 14-year high of $10/MMBtu hit in August, as a rail strike would halt coal deliveries and ramp up coal-to-gas switching activity. Elsewhere, data from the EIA pointed to 77 billion cubic feet of gas being added to storage by utilities in the week that ended September 9th, above estimates of 73 billion. On top of that, domestic supply is set to rise as the Cove Point LNG plant in Maryland is set to shut down for maintenance in October, disabling exports abroad and increasing stockpiles for domestic utilities. The event adds to the sharp delay in the restart of Freeport LNG’s Quintana export plant to November.
 
 

 
Markets
 

Major US stock indices extended losses on Friday to close at levels not seen since mid-July, as the concerning warning from FedEx reaffirmed investors’ worries about the darkening global growth outlook. The Dow closed almost 140 points lower, while the S&P 500 and the Nasdaq dropped 0.7% and 0.9%, respectively. FedEx shares plunged over 20% after it withdrew its full-year guidance and announced cost-cutting measures, citing “significantly worse” global economic trends that are set to compound as major central banks tighten monetary policy to combat surging inflation. All three benchmarks notched their fourth losing week in five, with the Dow Jones shedding over 4%, the S&P 500 retreating nearly 5%, and the Nasdaq falling 5.5%, pressured by sharp declines in policy-sensitive sectors.




Crypto
 

Bitcoin US Dollar traded at 20092 this Saturday September 17th, increasing 342 or 1.73 percent since the previous trading session. Looking back, over the last four weeks, Bitcoin gained 14.19 percent. Over the last 12 months, its price fell by 58.41 percent. Looking ahead, we forecast Bitcoin US Dollar to be priced at 19503 by the end of this quarter and at 14336 in one year, according to Trading Economics global macro models projections and analysts expectations.




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