Providence Capital

Inflation rates fell, while interest rates rose sharply in September. The explanation is possibly because statistics look back, but markets look forward. The oil market, which is important for inflation, looked tight and prices rose sharply. That price rise has yet to feed through to the rest of the economy. And even if inflation now … Read more

A few years ago, the financial world was as beautiful as Goldilocks: self-evident growth and low inflation. But it looks like it’s ugly stepsister has taken over. The manufacturing economies of this world are struggling. The West is ordering less, so the East, starring China, South Korea, Japan, and Taiwan, is getting fewer export orders. … Read more

This could be an account of a first boring summer-month. Do I hear ‘’summer”? When I step into the municipal outdoor pool early in the morning, it turns out to have cooled down considerably due to the rain, to about 19 degrees. I would have been better off stepping into the North Sea at around … Read more

It is starting to get a bit boring: interest rates, rising further as core inflation remains high, especially in Europe (around 5.5%). Energy prices do help ‘headline inflation’ to come down, except in Germany and the Netherlands (+6.8%) but sticky inflation remains sticky. The goods industry is slowing or stagnant while the service sector continues … Read more

There are increasing signs of a recession in the goods sector: during the pandemic, parcels were flying around our ears. Then we were stuck and could not even go out or on holiday either. We are now catching up, but we have had enough of buying stuff for a while now. That is why many … Read more

Inflation can also be profitable The earnings season has started again. Caution about profits has been trumped up for some time, but it still appears to be unwarranted. Companies in the food sector, such as Unilever, Procter & Gamble, Ahold, Coca Cola and Nestlé almost all managed to increase their sales prices more than expected. … Read more

Last month was quite turbulent in financial markets. There was fear of banks again, just like in 2008, but was this Pavlov reaction justified, this flight out of equities, into government bonds? Suppose you set up the Bank for Bakers and all the bakers come and bank with you. They deposit their savings with you … Read more

We are now two months into the new year: 1 month of interest rate optimism and 1 month of interest rate realism. Because inflation will not be chased away that easily, as the recent figures in France, Spain and Germany showed. These did not fall, they rose! It is sticky stuff, something like: if you … Read more

It is of all times, this battle in financial markets, but now it is even more topical: the fight between Hawks and Doves. The Hawks want a strict monetary policy, the doves allow things to be a bit milder. Last year, investors joined the Hawks: central bankers had remained Doves for too long. They had … Read more