The Victory Rally Without Victory

Good Morning Ladies and Gentlemen

“So they go on in strange paradox, decided only to be undecided, resolved to be irresolute, adamant for drift, solid for flidity, all-powerful to be impotent.”

Winston Churchill

The next U.S. affordability crisis is upon us. Prior to the outbreak of war, February’s inflation figures appeared poised to provide valuable insights into the Federal Reserve’s monetary policy direction, helping investors assess whether Kevin Warsh, Trump’s nominee for chair, could fulfil his commitment to implementing rate cuts. However, that outlook has become less clear, at least in the short term.

Verbal Intervention

The U.S. government’s constant verbal intervention has, for the time being, established short-term boundaries on oil and stock prices, within which the markets are likely to fluctuate over the next few trading days, maybe weeks. However, as long as the Strait of Hormuz remains closed, the overall outlook for investors has not fundamentally changed. Considering the potential risk for investors, the market looks reasonably calm.

No Victory to Celebrate

Nevertheless, it appears that the markets fluctuate more rapidly than I can brew a cup of tea. One moment, they surge as if celebrating a significant breakthrough; yet, beneath the surface, there is genuinely no victory to be had. In the next instant, the markets decline as Iranian drones, American rocket or Israeli bombs target critical infrastructures. This situation is undoubtedly stressful for investors, but it is likely to cause anxiety for the general public as well, as it fuels inflation, fosters demoralisation, creates an overall sense of unease or even leads to existential fears.

Ripe for Relief

In other words, people are tired of all of this and ripe for relief. Geopolitical signals, contradictory, improvised, and often quickly reversed, may trigger reflexive rallies that more accurately reflect investors’ desire for clarity than any genuine progress on the ground. Relief sweeping through equities, oil prices cooling briefly, and risk appetite flickering back to life, yet none of this rests on a foundation sturdy enough to justify the enthusiasm. Instead, every rally exposes a more fragile reality: a collective readiness to latch onto any narrative hinting at de-escalation, even when the underlying conflict remains unresolved and strategically unchanged. In this light, any “victory rally” emerges less as a sign of confidence and more as a reflection of uncertainty, an instance in which markets price in peace without the necessary conditions in place and celebrate an outcome that has yet to occur. Against this backdrop, investors must navigate a landscape where sentiment outpaces reality, and every headline carries the potential to become the next abrupt turning point. The pressing question now is not why markets rallied, but rather how long such rallies can endure when victory exists only in perception, not in fact.

Conclusion

It is widely acknowledged that dictators often take pleasure in wielding power and instilling fear. It seems we are at a point where continuity no longer holds sway, and people are constantly making new decisions.
Quite frankly, Ladies and Gentlemen, I do not really see the value in this behaviour, and I cannot think much of it.

Ladies and Gentlemen

Feel free to send your messages to smk@incrementum.li. Many thanks, indeed!

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

Yours truly,

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

Tel.: +423 237 26 60
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9494 Schaan/Liechtenstein
Mail: smk@incrementum.li