Autor: Dr. Stefan M. Kremeth

Good Morning Ladies and Gentlemen

“What started as an event a year ago became a pattern, became a trend, and is now a certain trend that can be extrapolated.”

Peter Atwater

The Greeks and Spartans inflicted substantial losses on the Persians, who, under King Xerxes, held advantages in both numbers and weaponry. The Battle of Thermopylae, fought in 480 BC, marked a pivotal moment in the Greco-Persian Wars. It took place at the narrow pass of Thermopylae, where the invading Achaemenid Persian Empire, led by Xerxes I, faced a coalition of Greek forces commanded by King Leonidas I of Sparta. This relatively small contingent of Greek troops, often reported to comprise around 7,000 soldiers, including approximately 300 Spartans, effectively utilised the terrain to obstruct the far larger Persian army, blocking the primary route into central Greece. The fierce resistance lasted several days and was characterised by three days of intense fighting, occurring simultaneously with naval engagements at Artemisium. Ultimately, the Greeks were outflanked, and their rear guard was overwhelmed. Nonetheless, their defence has become a powerful symbol of discipline, sacrifice, and resistance against overwhelming odds. Today, we seem to witness a similar struggle, with the roles reversed, as the Persians assume the Spartans’ position.

Inflation

According to Bank of America’s Commodity Inflation Trendspotter for food and beverage companies, input costs experienced a significant surge in March, climbing 373 basis points to 7.9% year-on-year, up from 4.2% in February and 3.6% in January. This notable increase was primarily driven by rising prices for diesel and heating oil. Considering that we have not yet fully experienced the impact of escalating costs for plastics and fertilisers, I am curious about how the upcoming figures for April, May, and June will unfold. In my view, this situation illustrates a sequential trend and a layering effect, with rising fertiliser costs and other factors, exacerbated by increasing fuel expenses.

Buying the Dip

The phenomenon of „buying on the dip“ has fostered a herd mentality that tends to move uniformly in one direction. Under the current U.S. administration, this has evolved into a form of blind adherence to TACO. Peter Atwater from Financial Insights observes that what started as an isolated occurrence a year ago has now developed into a consistent pattern, solidifying into a trend that can be confidently projected into the future. The confidence in the TACO trade has become so pronounced that guidance on maximising financial returns from it is readily available from ChatGPT. This automated buy-the-dip behaviour appears to be linked to a growing dependence on AI. It’s clear that the inclination to buy continuously without reevaluating the dip has almost become instinctual, diverging from the conditioned responses of previous generations.

Conclusion

The concept of „buying on the dip“ may not align with fundamental investment principles, yet it seems to yield positive short-term results. I assert that in the long run, both speculators and investors may ultimately face repercussions for this strategy. However, such consequences may not manifest in the immediate future, allowing this practice to continue for the time being, leaving markets in a state that appears detached from economic gravity, buoyed by liquidity, low interest rates, and confidence in political and central bank interventions. Yet, energy, the most fundamental input into economic activity, is reasserting itself as a critical constraint. Unlike demand-driven inflation, energy-driven inflation stems from physical scarcity, underinvestment, geopolitical fragmentation, and increasing system complexity. Normally, it cannot be resolved through monetary policy or unqualified social media posts alone. Despite this, markets continue to view the current energy shock as transitory, underestimating its long-term effects on growth, margins, and productivity. This disconnect underscores the limitations of today’s market participants’ financial abstractions. While financial markets may currently appear to function independently of gravitational constraints, the real economy operates on different principles. Ultimately, a reconciliation between these two domains is necessary and, I assume, will happen.

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

“Iran’s so far away, stocks can hit a record.”

John Authers

The ten-year inflation rates remain significantly lower than the levels observed during the Liberation Day panic. Despite the recent uptick in energy prices, the inflation swap market is exhibiting only a gradual increase. It maintains a stable trajectory, particularly in the long-term segment, at least for the time being.

Current Situation

Optimism regarding a potential negotiated settlement is driving global stock markets higher. Investors are continuing to adopt a ‚buy-the-dip‘ strategy. Meanwhile, the bond and inflation markets show significant stability, suggesting investors view the current geopolitical risks as a temporary disruption rather than a fundamental change in macroeconomic conditions.

Key interest rate expectations

Rate expectations remain notably stable in the short term, with market participants largely expecting unwavering policies from central banking authorities.

Eurozone Interest Rate Expectations

In the eurozone, one-month euro futures are forecasting two 25-basis-point rate hikes from the European Central Bank (ECB) by the end of 2026, the same expectation as last week. The upcoming ECB meeting will take place on April 30, with the deposit rate remaining at 2.0% since the decision on June 5, 2025.

U.S. Interest Rate Expectations

Futures traders are anticipating a significant interest rate cut by autumn 2027, a shift from the previous week when no such cut was expected. Currently, the US key interest rate is set within a range of 3.50% to 3.75%. The next Federal Reserve meeting is scheduled for Wednesday, April 29, and it will be the last meeting for the incumbent chair, Jerome Powell, provided that Kevin Warsh is confirmed by the Senate in time. The likelihood that the key interest rate will remain unchanged in April is 98%. While Powell will not be responsible for any further rate cuts, his potential successor, Kevin Warsh, would be, although not until autumn 2027.

Unnecessary Noise

U.S. President Donald Trump has intensified his ongoing dispute with Federal Reserve Chair Jerome Powell. In an interview with Fox Business, Trump indicated that he would dismiss Powell from the Fed’s Board of Governors if he did not resign following a leadership change at the central bank. Additionally, Trump expressed confidence that Kevin Warsh, his nominee to replace Powell, would soon secure confirmation from Congress. Powell has previously stated that he would continue to serve as chairman „pro tempore“ if Warsh is not confirmed by the end of his regular term in May.

Conclusion

While I certainly recognise opportunities for solid investments, I would not be surprised if the current almost carefree outlook results in increased volatility and challenges in the weeks and months ahead. To me, peace looks priced in, and markets seem to depend on a fragile narrative. The war does not help inflation go away any time soon, and unnecessary noise around the leadership change at the U.S. central bank is not what investors appreciate. It is going to stay interesting.

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

“All this hasty ‘shooting from the hip’ will have massive long-term consequences for U.S. financial hegemony. Washington is increasingly losing control here.”

Ronald P. Stöferle, Partner at Incrementum AG

From a historical standpoint, the belief that relations between Europe and the US have reached unprecedented precariousness today is fundamentally misguided. Such alarmist claims often stem from a deliberate disregard for historical context. When the past is overlooked, it may seem that current events are entirely novel.

More than One Goal

In our discussions about investing, we often look at goals that align with common aspirations, such as building wealth and securing financial security. However, it’s important to acknowledge that specific goals can differ significantly based on the unique needs and circumstances of individuals or groups. In today’s „Stefan’s Weekly,“ I have compiled a list of goals for four key stakeholders.

1. Our Investors’ Financial Goals

Our private investor’s primary objective is to achieve long-term growth in real wealth that aligns with their risk profile and individual needs. Most of our investors aim to preserve and enhance their purchasing power, targeting real (inflation-adjusted) wealth growth over a defined investment horizon rather than just in the short term. Depending on their risk appetite and goals, priorities can vary, such as capital preservation, which emphasises security and low volatility, and current income, which focuses on earning interest and dividends with moderate risk and limited volatility. Essentially, we advocate for a balanced approach to wealth accumulation that combines income generation and capital gains while maintaining moderate volatility.

2. Incrementum’s Goal is Our Commitment to Investors

We help our clients with a proactive, fundamental investment strategy. Our investment decisions are primarily guided by the fundamental strengths of individual companies and their operational performance. We place a strong emphasis on quality, sustainability, and long-term value creation. While we consider political and macroeconomic factors in our analysis, they do not take precedence in our approach. Ultimately, what matters most to us is the underlying business fundamentals, independent of short-term external influences.

3. The Goal of Financial Markets

Investors expect well-functioning financial markets to provide a dependable, equitable, and efficient framework. Markets should allocate capital effectively, enable transparent price formation, provide adequate liquidity, and support long-term investment strategies. While temporary volatility is tolerable, persistent distortions or any loss of integrity are not. Investors, therefore, expect financial market operators to deliver transparency and clear risk disclosure; a strong commitment to investors’ interests, free from hidden conflicts of interest; reliable market access together with secure settlement processes; and professional risk management that safeguards systemic stability. In short, financial markets should enable long-term value creation, and their operators must earn investors’ trust through integrity, transparency, and a consistent focus on investor interests.

4. Authorities’ Goal: Stable and Trustworthy Markets that Serve the Public Good

Authorities, supervisory bodies, and policymakers anticipate that financial markets will be stable, transparent, and driven by integrity. These markets should operate smoothly, facilitate reliable price formation, and mitigate systemic risks to safeguard both investors and the broader economy. Regulators and policymakers expect market participants to establish robust governance structures, implement effective risk management practices, provide clear and comprehensible information, and ensure consistent adherence to regulatory requirements. Protecting investors and consumers, maintaining market integrity, and ensuring compliance are seen as essential prerequisites for fostering lasting trust. In essence, financial markets should serve the public good, with their participants responsible for promoting stability, transparency, and trust.

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

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

Good Morning Ladies and Gentlemen

“Something you learn as a lifeguard: drowning people are pulling you down.”

Scott Kenneth Homer Bessent

Today’s Quote

The following quotation originates from Scott Bessent, an American entrepreneur and public servant. He has held the position of the 79th United States Secretary of the Treasury since 2025 and has a diverse background, including lifeguarding during his formative years.

Last Week’s Quote

Sir Ralph Norman Angell (26 December 1872 – 7 October 1967) was a lecturer, journalist, author, and a Member of the British Parliament representing the Labour Party (Norman Angell – Wikipedia). He was awarded the Nobel Peace Prize for his efforts to promote peace, particularly through his writings that argued modern economic interdependence renders war irrational and self-defeating. The quote we reference today comes from his book “The Great Illusion,” which he published in 1909.

Everything hinges on gold

„Before we turn to Johann Wolfgang von Goethe’s philosophical reflections on gold in “Faust” and then to the advantages of the Principality of Liechtenstein in terms of the significant benefits for investors in precious metals and other asset classes, let us briefly discuss the market behaviour, taking the example of precious metals, Bitcoin and other assets that have fluctuated significantly in recent weeks and months.“
This marks the beginning of an article I was asked to write for Executive Global Magazine. I have included the link to the article below, and I hope you find it enjoyable to read.

Link

Why Liechtenstein Offers Strong Advantages – Incrementum

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

”The economic cost of war was so great that no one could possibly hope to gain by starting a war the consequences of which would be so disastrous”

Sir Ralph Norman Angell

Due to fluctuations in financial markets, we have issued an extraordinary report on our clients‘ portfolios. Typically, we communicate quarterly, but this year we have already sent two concise extraordinary reports to our clients. I thought you might find this information interesting, so I wanted to share it with you.

„Two months of 2026 are now behind us.

Only a few weeks ago, I sent you an extraordinary report, and now so much has happened again that I am writing to you once more.
The political mood between the allied Western nations and the USA remains frosty. In addition, we are now confronted with a war between the USA, Israel and Iran, which is causing great stress throughout the entire region.

Current situation

Nevertheless, the portfolios continue to perform well. We have made minor adjustments to the portfolios. The energy-sector acquisitions mentioned in the last extraordinary interim report have brought stability to the portfolios.
I think the coming weeks will continue to be characterised by volatility. In times like these, we also like companies that have continuously adapted, restructured their processes and increased productivity during the Covid-19 pandemic and the outbreak of war between Russia and Ukraine. In other words, they knew and know how to hold their own under the most difficult circumstances and deliver regular dividends. In addition, we are still deliberately maintaining a fairly high cash ratio.

Defence stocks

I am often asked why we do not invest in defence stocks. From an investor’s perspective, I understand this question.
The fact is that in my life, I generally try to take a pragmatic approach, not to get too caught up in moral and ethical discussions, to act in a rational and ethical manner, and yet to achieve reasonable returns for our customers.
Nevertheless, and this is where the difficulty lies for me: I have my limits, and investing in arms manufacturers is outside my comfort zone, for which I ask for your understanding. If you, our valued customers, would like to invest in defence stocks, please contact us, and we will implement this for you as requested.

Outlook

In the last extraordinary interim report, I wrote: „The political outlook is likely to remain uncertain in the coming months. We therefore do not want to be fully invested at present and are maintaining a healthy cash quota so that we can buy at favourable prices in the event of possible setbacks. On the other hand, there are indeed economic silver linings on the horizon, even in Europe.“ In my opinion, this still applies.
If you, dear customers, expressly wish to increase or decrease your level of investment, please contact us, and we will adjust it together with you.

Thank you very much

Thank you very much, dear customers, for your trust in my/our considerations and in our actions. As always, I hope these remarks have given you some insight into your asset manager’s thinking. If you have any questions, please do not hesitate to contact us. We will be happy to answer them.

Stay healthy, and we hope to see you soon!“

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

”Right or wrong are not a matter of personal opinion!”

also attributed to Dennis Prager

We (humans) engage in a constant manipulation of our emotional balance, which is a typical aspect of human behaviour. In today’s world, we also utilise social media to facilitate this process, making it particularly intriguing because many companies capitalise on this tendency, reaping substantial profits. Consider the plethora of angry posts and videos that ignite feelings of outrage, fear, despair, and hopelessness. For social media companies, this is highly advantageous; within today’s digital outrage economy, anger acts as a catalyst for increased engagement, and greater engagement translates into greater financial gain.

Last Week’s «Stefan’s Weekly»

The quote from last week, “How quickly arrives suddenly?” has gained considerable significance in light of the recent military actions involving Israel and the United States against Iran. This occurrence illustrates that the concept of ‘suddenly’ can manifest with startling rapidity. It serves as a vital reminder of the unpredictable nature of geopolitical (and other) events and the necessity of remaining alert to the potential for abrupt developments in international (and other) relations.

Inflation

Last week, I noted that if WTI crude reached USD 70, it could contribute to higher inflation. Even without higher oil prices, we anticipated that the U.S. inflation rate would likely rise by more than 0.2% per month in the months ahead. To be candid, with WTI now exceeding USD 70, it is perhaps unnecessary to state that I would be surprised if inflation does not increase in the near future.

However

However, I have my doubts that Iran is truly capable of disrupting the region’s energy infrastructure for an extended period. Of course, if gas and oil prices remain at their current levels or rise further, inflation would rise significantly. Yet, I believe that neither the United States nor Iran is motivated to have this conflict drag on. The current U.S. administration is concerned about the midterm elections, while Iran and its allies are too constrained to conduct sustained military counterstrikes or effectively block the Strait of Hormuz for long, and I imagine Iran wishes to resume oil sales at some point.

Substantial Cost of War

One of my readers inquired why the U.S. financial markets have not experienced a more substantial decline, particularly given the United States‘ involvement in the war and the substantial costs that will inevitably be borne by the American public. This is an excellent question!

Market Perception and the Conflict’s Windfall

It almost seems reasonable to assume that the prevailing market perspective views the American corporate world as the primary beneficiary in the conflict between the U.S., Israel and Iran. If the financial community held a different opinion, we would likely see a more significant drop in the valuation of U.S. equities, wouldn’t we?

Which Means?

Well, Ladies and Gentlemen, it is important to recognise that most of the financial burden associated with this war is primarily borne by the public, in this case, the American people, while the corresponding potential financial profits are predominantly accrued by some members of the corporate sector. This scenario exemplifies an asymmetric risk-reward structure, in which one party assumes disproportionate risk while the other concentrates the rewards, but that is a different story.

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

”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