You have two choices | Forex Live

The market navigates through different outcomes and in the simplest terms, here’s how to shape it.

1) High inflation with continued growth and Fed increase above 4%

This is the scenario that the market wrestles with most of the year and the results speak for themselves. It was the S&P 500’s worst H1 since 1970 and the Nasdaq’s worst ever.

2) stagnation but inflation under control

The word “stagnation” never sounds good to investors, but I would argue that it is true, this is the best case scenario. As the market shifted its focus to the recession, borrowing costs fell and a final rate of 3.25-3.50% was priced into the feds, dropping to 2.75% after about 8 months.

Unfortunately, the markets have been drunk on cheap money for far too long and are hopelessly addicted now. Everything is lifted. If interest rates rise and we can push the can down the road when the bond bubble bursts, there will be room for the seemingly strange “stagnation spike”.

Third Scenario

The nightmare scenario is stagflation, where we get stagflation and inflation

inflation

Inflation is defined as a quantitative measure of the rate at which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general price level where you actually buy a particular currency for less than in previous periods. In terms of valuation of strength or currencies, and therefore foreign exchange, inflation or its measures are very influential. Inflation stems from the general creation of money. This money is measured by the level of the total money supply of a particular currency, for example the US dollar, which is constantly increasing. However, an increase in the money supply does not necessarily mean that there is inflation. What leads to inflation is a faster increase in the money supply relative to the wealth produced (measured in GDP). As such, this generates demand pressure on supply which does not increase at the same rate. Then the CPI rises causing inflation, so how does inflation affect forex? The level of inflation has a direct effect on the exchange rate between two currencies at several levels, including purchasing power parity which attempts to compare the different purchasing powers of each according to the general price level. In doing so, this makes it possible to determine which country has the most expensive cost of living, so the currency with the highest inflation rate loses its value and falls in value, while the currency with the lowest inflation rate rises in value in the forex market. Also affected. Extremely high inflation rates drive interest rates higher, causing the currency to depreciate on foreign currencies. Conversely, very low inflation (or deflation) pushes interest rates down, causing the currency to appreciate in the forex market.

Inflation is defined as a quantitative measure of the rate at which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general price level where you actually buy a particular currency for less than in previous periods. In terms of valuation of strength or currencies, and therefore foreign exchange, inflation or its measures are very influential. Inflation stems from the general creation of money. This money is measured by the level of the total money supply of a particular currency, for example the US dollar, which is constantly increasing. However, an increase in the money supply does not necessarily mean that there is inflation. What leads to inflation is a faster increase in the money supply relative to the wealth produced (measured in GDP). As such, this generates demand pressure on supply which does not increase at the same rate. Then the CPI rises causing inflation, so how does inflation affect forex? The level of inflation has a direct effect on the exchange rate between two currencies at several levels, including purchasing power parity which attempts to compare the different purchasing powers of each according to the general price level. In doing so, this makes it possible to determine which country has the most expensive cost of living, so the currency with the highest inflation rate loses its value and falls in value, while the currency with the lowest inflation rate rises in value in the forex market. Also affected. Extremely high inflation rates drive interest rates higher, causing the currency to depreciate on foreign currencies. Conversely, very low inflation (or deflation) pushes interest rates down, causing the currency to appreciate in the forex market.
Read this term do not fall. That may be possible if the world continues to be short of goods, or if confidence in central banks is lost. I think we’ve priced an opportunity for that in the past few weeks, but given how quickly consumer confidence and industrial orders are declining, along with goods

goods

Commodities are assets that grow naturally or occur in the environment. Most commonly, this includes precious metals such as gold, silver, and palladium. Other than metals, commodities can also focus on agricultural or industrial commodities that are central to manufacturing or other sectors. This includes crude oil, copper, wheat, etc. For other assets, commodities are a very complex form of investment, with many similarities and differences to existing products. Commodities can be traded on exchanges where investors work as a team to buy or trade products in an effort to make a profit from volatility. market prices or because they need a particular product, in addition, commodities are often traded through the use of exchange-traded funds (ETFs) to give investors exposure. Trading is not only for institutional traders, but also for regular retail traders, almost all retail brokers carry some commodity offerings, giving investors access to these assets, and investors, just like other corporate or institutional investors, can make a profit from the daily changes in commodity prices. There are many methods that investors can use to trade commodities. Commodities can be traded in futures contracts – these are contracts that direct the purchase or trading of a commodity at a particular price. Futures trading can be particularly risky and is usually reserved for more advanced traders due to the complexity of these trades, in addition, commodities can also be traded with options – meaning that the commodity is bought or traded on a certain date and price. They are usually traded with leverage, unlike other assets, which can result in significant profits or losses due to fluctuations in the markets.

Commodities are assets that grow naturally or occur in the environment. Most commonly, this includes precious metals such as gold, silver, and palladium. Other than metals, commodities can also focus on agricultural or industrial commodities that are central to manufacturing or other sectors. This includes crude oil, copper, wheat, etc. For other assets, commodities are a very complex form of investment, with many similarities and differences to existing products. Commodities can be traded on exchanges where investors work as a team to buy or trade products in an effort to make a profit from volatility. market prices or because they need a particular product, in addition, commodities are often traded through the use of exchange-traded funds (ETFs) to give investors exposure. Trading is not only for institutional traders, but also for regular retail traders, almost all retail brokers carry some commodity offerings, giving investors access to these assets, and investors, just like other corporate or institutional investors, can make a profit from the daily changes in commodity prices. There are many methods that investors can use to trade commodities. Commodities can be traded in futures contracts – these are contracts that direct the purchase or trading of a commodity at a particular price. Futures trading can be particularly risky and is usually reserved for more advanced traders due to the complexity of these trades, in addition, commodities can also be traded with options – meaning that the commodity is bought or traded on a certain date and price. They are usually traded with leverage, unlike other assets, which can result in significant profits or losses due to fluctuations in the markets.
Read this termThis has become far away.

Overall, I don’t see a “recession” scenario that bad, especially since I think the blow to the job market will be modest.

SPX daily chart

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