The US and Singapore Stock Exchanges went down again after Jerome Powell asserted that the rate hikes are not over yet. Powell said “inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go.” What else can Powell say in the circumstances as it is? If Powell were to state that rate hikes are over and markets get too excited, then inflation may spin out of control again. The only way out is to maintain the hawkish tone to keep everyone from partying.
Global Uncertainty From Russian-Ukraine War.
The Russian Ukraine war took an interesting turn with a dramatic plot twist of a rebellion by Putin's closest ally- the Wagner millitant group. Wagner boss Yevgeny Prigozhin claimed his forces were in control of military sites in Rostov that were used for staging Russian war efforts in Ukraine. Rostov also houses the command centre for the Russian joint group of forces in Ukraine as a whole and is therefore a critical logistical hub for the Russian army.
If Ukraine continued to counter attack and win more grounds by taking advantage of the current mutiny, there is always a probability that Putin may denotate a small nuclear device in order to cling to power. Putin cannot afford to lose the war- his political survival depends on it albeit the various miscalculation and screw ups made by him. Do not think that a mini scale nuclear attack is not possible- the mad man has blown up Ukrainian dam that unleashed great sufferings already.
Food price may also spiral out of control if Putin stop the Black Sea Grain Initiative even if there is no nuclear fiasco.
Invest at Your Own Risk
I am glad that prices of stocks and REITs have come down again which allows one to continue to accumulate good blue chip stocks and REITs at a cheaper valuation despite various macro-economic threats such as inflation and war. Invest at your own risk.....who dares win!
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