看空

FOMC Protocols, Oil Uncertainty, Chip Shortages

The main event of yesterday was the publication of the minutes of the last Federal Reserve Open Market Committeemeeting. The markets have recently relaxed a lot and have forgotten that the US Central Bank is going to tighten monetary policy earlier than initially expected. In theory, the protocols were supposed to remind about this.

But rather, they reminded the opposite. This refers to the basic mantra of the Fed: let's not rush. In general, the emphasis in the minutes was placed on the start of the discussion on the reduction of monthly bond purchases. In general, buyers in the US stock market can breathe - they are lucky once again. However, this does not negate the fact that the market is radically overbought and that there is a bubble on it.

Germany, meanwhile, reported a decline in industrial production. The reason is the subsidence of the economic activity of automakers. But not because of the lack of demand for products, but because of the bottlenecks in the production process associated with a shortage of chips.

But if for someone the lack of chips is a problem (automakers, manufacturers of equipment and smartphones), then for others it is even an opportunity. For example, Samsung Electronics reported a 53% year-on-year increase in operating profit in its preliminary second quarter earnings report for the quarter. So the investment strategy can be as follows: we sell everything that suffers from scarcity and buy everything that benefits from it.

In the meantime, strange things continue to happen in the oil market. We have warned more than once: prices that strongly depend on investor sentiment are extremely volatile. As soon as optimism changes to pessimism and literally out of the blue there are strong drops in prices. So Brent crude oil went below 72.60 yesterday. The formal reason was the news about the UAE's plans to increase production. But it is clear that the point here is not in the UAE as such, but in the fact that OPEC + can simply fall apart and then an exciting game "every man for himself" will begin, which will inevitably provoke a sharp increase in supply on the market, since everyone will try to get the most out of situation, as well as to maintain or even increase their market share.