Monat: Februar 2026

Good Morning Ladies and Gentlemen

”How quickly arrives suddenly?”

Pete Doherty (during his concert in Zürich in February 2026)

Richard III is a historical tragedy that explores themes of unchecked ambition, political manipulation, and the corrupting influence of power, centred around one of Shakespeare’s most notorious villains. Reading the news about today’s social and political leaders, I often find myself experiencing a flashback to this narrative. Although I struggled with the linguistic complexities of Shakespeare’s tale about a corrupt and abusive king and ultimately did not finish it, I am nonetheless familiar with the drama’s content and seem to recognise striking parallels with the current social and political elite.

First Act: Eurozone Inflation

The eurozone’s inflation rate was 1.7% in January. Starting in February 2026, the base effect is expected to increase. In February, the eurozone inflation rate may drop to 1.5%, and it could subsequently fall below 1.2% through April. The strengthening euro is exerting downward pressure on commodity prices, helping to mitigate their rise and, in turn, the overall inflation rate. European Central Bank officials currently see no justification for further interest rate cuts or hikes. From today’s perspective, this outlook appears well-founded.

Second Act: U.S. Inflation

The US Bureau of Labour Statistics (BLS) reported January inflation at 2.4%, a decrease from December’s rate of 2.7%. In January and February, a base effect reduces inflation. Starting in March, however, this base effect should become less pronounced. While not all factors can be attributed solely to the base effect, I would still not be surprised to see the U.S. inflation rate in February to be lower than January’s (or remain stable). For March and the following months, I then expect an average monthly increase of 0.2%, resulting in an inflation rate comparable to that of the same month in the previous year. If we did consider only the base effect, the U.S. inflation rate would be expected to decline steadily through 2026. Yet, because of a weakening dollar and rising commodity prices, inflationary pressures are mounting. Should WTI crude reach USD 70 and stay around or even above it, that alone could drive inflation higher. Taking this into consideration, I believe the U.S. inflation rate will likely increase by more than 0.2% per month in the upcoming months.

Third Act: How to Measure Inflation?

In a recent article in the Swiss financial newspaper “Finanz und Wirtschaft”, I read about a well-known fact that seems to be challenged. It states that, for over forty years, American economists have advocated using the productivity argument to measure inflation in the United States. Michael Boskin, a professor at Stanford University’s Hoover Institution and a visiting scholar alongside the future Fed Chair Kevin Warsh, was one of the pioneers in this regard. In the 1990s, Boskin showed that when measuring prices, it is essential to account for quality improvements in products like PCs and cars; failing to do so risks overestimating inflation. His research was groundbreaking and led to the regular and meticulous revision of the baskets of goods that underpin consumer price indices worldwide. This process includes incorporating quality improvements, a method known as hedonic price calculation. (Understanding Hedonic Pricing: Definition, Uses, and Real Estate Examples).
However, three researchers from distinct universities have now conducted a study that challenges the prevailing understanding of inflation measurement. Their findings indicate that the current methodology for assessing inflation using microdata may understate the actual inflation rate in the United States, with discrepancies ranging from 0.3 to 1 percentage points annually.
The study calls into question the reliability of existing inflation metrics and suggests a need for revised approaches to accurately reflect economic conditions (https://www.nber.org/papers/w34803).
I find this study very interesting because it may explain the gap between official inflation data and the inflation consumers feel in daily life.

Fourth Act: Finally, a Curious Fact

As my partner Ronni Stöferle pointed out in a private email to friends, Google is set to launch Century Bonds, which feature a remarkable 100-year maturity. This development speaks volumes: firstly, it demonstrates Big Tech’s confidence in maintaining its dominance for generations to come. Secondly, it reveals that institutional investors are so keen on ‘security’ that they are planning as far ahead as 2126. Historically, such long-term commitments have often indicated the final peak of a market cycle.

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
Cell: +41 79 303 48 39
Im alten Riet 153
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li

Good Morning Ladies and Gentlemen

”Sicilians never want to improve for the simple reason that they think themselves perfect,” says Don Fabrizio. “Their vanity is stronger than their misery.”

Bloomberg’s “Balance of Power”

The appointed Federal Reserve Chairman, Kevin Warsh, has yet to receive Senate confirmation. In contrast to the sitting Chairman Jerome Powell, who would not oversee any further interest-rate reductions, Warsh is expected to implement three cuts. There exists a significant likelihood that during his inaugural meeting on June 17, Warsh will signal an intention to lower the key interest rate by 25 basis points. Moreover, breakeven inflation is a critical leading indicator of the U.S. inflation rate. As reported, the US inflation rate for January was 2.4%, below the anticipated 2.5%. This discrepancy can be attributed in part to base effects, and it is noteworthy that the month-over-month change was also less pronounced than projected.

Big Tech Capex

The capital expenditures (capex) of Big Tech, projected at USD 660 billion, appear remarkably high. This marks a significant increase from USD 410 billion in 2025 (a 60% rise) and from USD 245 billion in 2024 (a 165% rise). While there are concerns surrounding capex in the oil and mining sectors, areas that I find comparatively minor, it’s important to consider how Big Tech’s AI-related capital investments will translate into returns.

Versus Oil and Mining Industry Capex

Typically, capex in the oil and mining industries generates additional cash flow, including free cash flow, but it remains uncertain how Big Tech’s extensive capex will yield similar returns. The enormous capex spending in the tech sector has already led to a largely unrecognised sharp decline in free cash flow for big techs since mid-2024. EPS is holding up, debt is increasing, while free cash flow is decreasing. If EPS fails to meet investors‘ expectations, the stock prices will eventually suffer big time.

From Another Angle

Or, as my partner, Hans Schiefen, recently wrote, American and European oil and gas producers account for approximately 7.5% of the overall theme. Although the energy sector accounts for only about 3% of the S&P 500’s market capitalisation, it generates around 12% of the index’s free cash flow. This disparity underscores our strong interest in this sector. Following years of balance sheet restructuring and a more prudent approach to capital management, the industry is now well-positioned to deliver strong profits for its shareholders. Additionally, it presents a countercyclical potential should energy prices rise in the medium term.

More on Oil

I also find it interesting that India pledged to stop buying oil from Russia. This raises the question of who will buy Russian oil (most likely China), who will buy Iranian oil (most likely China and India), and who will benefit most from rising oil prices (most likely Russia). Since I believe the Trump administration will seek to avoid military escalation at almost any cost, given this year’s midterm elections and the risk of inflation.

Oil, Tech, IPOs and the S&P 500

However, it is also important to note that energy accounts for just over 3% of the S&P 500. According to the latest Bank of America survey, many investors are significantly underweight in this sector. While the AI bubble has not fully burst, it is currently in a deflationary phase. The record number of initial public offerings (IPOs) planned for 2026, such as SpaceX, valued at USD 1’000 billion; OpenAI, valued at USD 500 billion; and Anthropic, valued at USD 300 billion, has the potential to boost markets as these events approach. Nonetheless, fund managers are facing low liquidity reserves, with an average cash ratio of only 3.4%. As we also see a shift away from technology stocks towards commodities and energy, from large-cap to small-cap stocks, and from growth to value stocks, I find myself questioning where the cash for participation in these IPOs will come from. If fund managers participating in those IPOs do not want to increase their weighting in tech stocks, they will probably be forced to sell established names in the sector. Interesting, no?

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
Cell: +41 79 303 48 39
Im alten Riet 153
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li

Good Morning Ladies and Gentlemen

”Crypto is all over the Epstein files. In the documents that were released, a search for Bitcoin yields 1’520 hits.”

Bloomberg’s “Odd Lots”

According to an analysis by The Economist, a depreciation of the U.S. dollar is likely to reduce the weight of U.S. assets in global financial indices. This reduction in weight may prompt investors who closely track benchmark indices to divest from these assets. Consequently, such actions could exacerbate the dollar’s decline, thereby perpetuating a detrimental feedback loop. (Felder 06.02.26)

Market Movement I

Significant fluctuations in asset prices commonly lead investors to hypothesise about the emergence of critical information that influences market conditions. However, recent observations suggest that intentional, collective action among investors is the primary driver of pronounced market movements. This phenomenon has, for example, been evident in recent high volatility in silver prices, which have fluctuated both upward and downward.

Market Movement II

Buyers typically have their own motivations for making a purchase. However, it’s important to recognise that, alongside every purchase, a sale also occurs. This indicates that sellers also have reasons for their actions. After prices have soared, reports often focus on the presumed motivations for the buying decisions. Yet, the reasoning of the seller should arguably attract even more attention, as they had the foresight to hold onto the desired goods for a period of time.

Market Movement III

Ladies and Gentlemen, market dynamics are not dictated by theoretical musings or abstract discussions; rather, they are driven by order execution. Consequently, even if investors hold strong convictions about their market outlooks, significant price appreciation always necessitates the infusion of new capital.

Conclusion

Citing the former analysis from a well-known international brokerage house, “The S&P 500 has decisively broken down versus gold. That’s a rare signal for stocks that has typically been followed by difficult years for investors.” For the time being, Ladies and Gentlemen, we see quite the opposite, and it may change again. That is what financial markets are all about. However, the point I want to make is, why is it that at the top of a bull run, some analysts feel inclined to extrapolate? Beats me!

Seasonal Reflections

Anyway, my partner, Hans Schiefen, is the manager of the “Incrementum All Seasons Fund” and writes a regular newsletter to update his investors, among others, on the fund and on what he considers relevant in the investment universe. I have included the link to the latest edition for your convenience. If you like it, you can become a subscriber for free.

Seasonsal Reflections – 2026/01 (dt.)
Seasonal Reflections – 2026/01 (engl.)

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
Cell: +41 79 303 48 39
Im alten Riet 153
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li

Good Morning Ladies and Gentlemen

”Middle powers must act together because if you are not at the table, you are on the menu.”

Mark Carney

Last week, I indicated that I would be sharing my thoughts on “The Price of Influence: Consequences of Corporate Giving to Politicians” in this week’s edition of „Stefan’s Weekly.“
To summarise this rather fascinating topic: Politicians often exhibit loyalty towards corporations, which can lead to rewards or penalties influenced by political cycles. A close association with a particular politician may invite regulatory scrutiny or retaliation as the political landscape evolves.

Corporate Contributions with Individual Politicians

Corporate contributions that align with specific politicians but diverge from genuine corporate values or consumer preferences can lead to revenue losses, stock volatility, and diminished competitiveness. High-profile cases illustrate how political stances or donations can incite public backlash, legal challenges, or government pushback, all of which can adversely affect financial performance.

Reputational Damage and Consumer Backlash

Research indicates that the dynamics of political connections can shift from beneficial to detrimental when political power changes or a corporation becomes associated with controversial politicians or policies. In contexts characterised by heightened polarisation, firms with political affiliations may experience reputational harm, leading to potential misallocation of capital.

Mismatch between Corporate Values and Political Behaviour

Contemporary consumers and employees increasingly expect corporate political actions to align with prevailing public values. When an organisation publicly espouses a particular stance while simultaneously endorsing political figures who advocate contradictory policies, the brand’s credibility may be significantly undermined, potentially leading to severe repercussions.

Regulatory Retaliation

Political loyalty can influence the relationship between politicians and corporations, leading to differential treatment based on the prevailing political climate. Corporations that align with specific politicians may be subject to favourable or adverse regulatory scrutiny, depending on the dynamics of the political cycle. This association can invite either rewards or punitive measures as political fortunes shift, highlighting the complex interplay between political affiliation and corporate regulation.

Increased Vulnerability to Corruption Scandals

Political loyalty can increase corporations‘ susceptibility to investigations, legal liabilities, and corruption-related repercussions, as exemplified by the FirstEnergy scandal.

From Boycotts to Potential Brand Erosion

Research indicates that political contributions represent the primary catalyst for consumer boycotts targeting corporations. The endorsement of polarising political figures inflicts lasting reputational damage on these companies, ultimately prompting consumers to redirect their spending to rival entities.

Conclusion

In conclusion, I believe the costs of influence and the consequences of corporate giving to politicians will ultimately be borne by consumers.
In regard to today’s quote, I believe that many global political leaders should take to heart the words of Canada’s Prime Minister Mark Carney: “Middle powers must act together because if you are not at the table, you are on the menu.” As we all know, a fundamental principle of physics states that when particles come together, their combined mass is greater than the sum of their individual parts.

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
Cell: +41 79 303 48 39
Im alten Riet 153
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li