Your Feedback and ECB Policy Meeting Conclusion

Good Morning Ladies and Gentlemen

“I object to intellect without discipline.”

by Mr. Spock

Thank you

Thank you for your positive feedback on my last «Stefan’s Weekly». I was happy to read that many of my readers were also into Star Trek and Mr. Spock in their youth. Mr. Spock was one of my heroes when I was a boy. Because of your positive feedback and because he was my hero, I wanted to share another quote by him with you today.

Your feedback on conviction-building

I want to share an excerpt from a brief e-mail conversation with John, a long-time reader and former year-end competition winner. He wrote: «Dealing with randomness is unsettling. Notice how financial outlets always comment on why the markets move daily.” My reply: «Absolutely, it is big business to put investors through emotions!» Furthermore, «Thinking about Mr Spock’s quote…people seem very forgiving of being misinformed or lied to if they are told what they want to hear…reinforcing their conviction.» My reply: «This drives me crazy; why are people forgetting so quickly?»

ECB policy meeting; my personal conclusion

At their first monetary policy meeting in 2024, ECB President Christine Lagarde and her «guardians of the euro» decided yesterday on their first monetary policy meeting this year to leave the key interest rate at 4.5% and the deposit rate at the record level of 4 %. In their statement, they did not indicate when the first interest rate cut may be expected; however, they claimed that the future decisions of the ECB Governing Council will ensure that key interest rates remain at a sufficiently restrictive level for as long as necessary.

What does this mean?

You may ask what this means for investors. It means there will not be any immediate interest cut in the euro currency area, not like widely expected in the second half of Q4 2023. However, this also means that the carrot will continue to be held in front of our noses, and we can expect a rate cut just later than market participants originally expected. It also means that the ECB management does not want to let anyone look at its cards and keeps all options open.

Okay, but is this now good or bad for equities, precious metals, bonds, etc?

I imagine markets will stay somewhat lacklustre for a few more days or maybe even weeks but may move up afterwards. I would not be surprised to see investors return to the «rate cut» narrative, leading to a positive bias as a consequence.

Ladies and Gentlemen

As always, please share your opinion with me, but please do not forget (instead of hitting the reply button) to send your messages to smk@incrementum.li

Many thanks, indeed!

I wish you an excellent start to the day and the weekend!

Yours truly,

Stefan M. Kremeth
CEO & Head of Wealth Management
Incrementum AG – we love managing assets

Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 102
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li