Introduction
The great reset has been widely discussed in the economic arena, bringing up issues related to geopolitics, inflation, presidential elections, and a possible recession. These topics directly influence market behavior, and analyzing these factors is crucial for understanding the current economic situation and predicting possible future scenarios.
Geopolitics and Market Uncertainty
The Great Reset and Possible Scenarios
The great reset raises questions about the future of the global economy. Concerns include geopolitical issues, presidential elections, and even the possibility of an economic depression. However, there are also scenarios in which markets continue to rise, challenging pessimistic forecasts.
Reviewing the Bearish Narrative
A significant repositioning of capital is underway, with investment estimates potentially reaching six million dollars in the coming months. This reflects the need to reassess the bearish (pessimistic) stance in light of recent market movements.
The Importance of Geopolitical Research
Researchers in geopolitics and elections have produced a vast amount of information. Consolidating these analyses is essential for understanding the impact of these events on markets. Although geopolitical crises, such as the issues with Iran and Russia, may cause concern, the current scenario indicates that these issues are unlikely to trigger a Black Swan event in the market.
The Russia-Ukraine Situation
The war between Russia and Ukraine, now over two years long, is expected to continue as a war of attrition. China’s invasion of Taiwan is another concern, but it is unlikely to happen while the country is trying to reverse its internal economic crisis.
Inflation, Recession, and Market Forecasts
Inflation and Corporate Pricing Power
Daily earnings calls reports show that companies’ pricing power has weakened, suggesting that the inflation scenario is unlikely to persist. The market is currently positioned for a “soft landing,” with gold rising, but this may be incorrect. The forecast is for possible deflation, especially after the recent 4-5% drop in oil prices.
Deflationary Narrative and Volatility
The weakening of companies’ pricing power confirms that inflation is not on the rise. While there is natural volatility in the market, indicators point to short-term economic stability, with no significant price changes on the horizon.
The Israel and Iran Situation
Israel’s Response to Iran’s Nuclear Threats
Israel recently suggested that it would not strike Iran’s nuclear enrichment facilities with 30,000-pound bunker-busting bombs. Although the situation in the Middle East appears volatile, geopolitical actions to date indicate that this region is not likely to be the factor that causes a global economic collapse.
Elections and the Impact on the Stock Market
Election Volatility Unlikely to Impact the Market
The volatility surrounding the U.S. presidential elections has been a topic of debate, but forecasts indicate that there are unlikely to be significant impacts on the stock market. With a high probability of a split House and Senate, political changes are not expected to significantly affect the economic outlook.
Post-Election Stock Market Scenario
Historically, the stock market tends to stabilize after elections, offering more certainty to investors. Based on economic analyses, there are no significant expectations that the election results will drastically alter the current landscape.
Recession Risks and Market Outlook
Recession Thesis
Current economic analysis suggests that, while the possibility of a recession is being discussed, there is still uncertainty about its development. As in the dotcom bubble and in 2007, predictions of a possible “soft landing” may be premature. However, the upcoming earnings reports will be crucial for a clearer view of market performance.
Market Results and Outlook
In the coming weeks, it will be essential to monitor corporate earnings reports, which will provide greater clarity on the economic situation. The behavior of oil, the stability of corporate earnings, and political decisions in the coming months will be key indicators in predicting a possible recession.
Key points:
- A 4-5% drop in oil prices.
- Weakening corporate pricing power.
- Signs of geopolitical stabilization between Israel and Iran.
- Election volatility with minimal market impact.
