Geopolitics and Markets Review 29th August 2022:

9 fascinating things happening in the world of geopolitics and the financial markets:

Global indices are dropping this morning, as the $DXY tops $109, and the $SPX stocks above the 50-day moving average have dropped to 63%. Powell’s comments at Jackson Hole last week, in which he said there will be painful times ahead as he plans on raising rates until evidence inflation is dropping, or something else breaks. 10-year is back above 3% and 30-year US mortgage rates rose close to 6% again. $SPX still sits above 4000, but Jackson Hole made Powell’s intentions clear, and bearish sentiment is returning to the markets.

During the Financial Crisis, and any bear market period, there are large bear market rallies. The Financial Crisis had 8%, 12%, 7%, 18%, and 24% rallies, all while in an overall bearish trend. I look at fundamentals to determine if these rallies could be sustained and turn the trend bullish again. Powell’s comments demonstrate he doesn’t think market fundamentals have changed and so he continues to embrace his inner Paul Volcker.

Over the last few weeks, we’ve been focusing on some of the bulk carriers coming out of the Black Sea from the port near Odesa. The Brave Commander, heading to Djibouti, is scheduled to arrive on Wednesday, and is through the Suez Canal and heading through the Red Sea. The Bonita is on the same pathway, but its end location is unknown. Final shipping note, the USS George H.W.Bush warship entered the Mediterranean a few days ago and is rumoured to be taking over from the USS Harry S.Truman which has been situated in the Mediterranean over the last few months.