Market Movement: What Drives Prices in Financial Markets?

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
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Mail: smk@incrementum.li