Hey There Income Hunter,

 

It doesn’t look like China is going to play nice with the US.

 

First, Bloomberg reported this week that Russian coal and oil paid for in yuan is on its way to China. This will make it very difficult for the US to win the sanctions battle.

 

Then China threatened  ‘Forceful Measures’ if Pelosi was to go through with a visit to Taiwan. China lodged an official protest, saying it would violate “one-China” understanding.

 

The trip was “postponed” after Pelosi announced a positive COVID result.

 

Senate Voting to Sustain High Inflation

 

The Senate is scheduled to vote on a bill to revoke normal trade status with Russia. 

 

Really?

 

I guess we don’t ever want to ever see inflation come down.

 

So, we are going to cut US trade with Russia even though they are responsible for 50% of US uranium imports, 19% of the world’s aluminum and copper, 20% of battery-grade nickel, 20% wheat, and dominance in precious metals such as palladium, platinum. 

 

I guess that leaves the heavy lifting to battle inflation up to the Fed … 

 

Anyone feeling comfortable with how this is all playing out so far? 

 

Mercedes-Benz Sales Drop

 

After reporting in January that car sales would drop by 5%, Mercedes reported a drop of 15% yesterday – mainly due to semiconductor bottlenecks. 

 

The bottlenecks will not ease up much when trade is even more shut down now than it was before thanks to tightening sanctions

 

Wealth Destruction in Corporate Bonds

 

We are witnessing the most destructive negative wealth effect in history.

 

Let’s take a look at the damage being done in the corporate bond market in 2022 … 

 

• The world’s safest corporate debt has tanked by $805 billion
• The global junk bond market has lost $236 billion
• The BBG global bond index is down 11% from its peak last year with $26.6 trillion lost in the index’s market value.

Now the FED Will Be Selling Bonds

 

So, now the Fed is going to join the global sellers of bonds and sell $95 billion a month through the banking system …

 

No wonder Banks have been on a march downward this year … 

 

So far this year Power Income Trader has booked gains of 62%, 123% and 133% on bearish option strategies on the SPDR Select Sector Financial ETF (Ticker: XLF).

 

Each downtrend for 2022 started from a lower level and there is a good chance this latest leg down will as well. Here is why …

 

Financial conditions will get tighter much faster when the Fed adds quantitative tightening (QT) to their rate hiking cycle.

 

Not many traders understand this but at nearly $100bn QT a month in 5 months that will equate to 5 more rate hikes on top of the almost 9 rate kies of .25% priced into the market now. 

 

 

Bring It Home

 

If you want to receive these trades directly by email and text and learn how to take advantage of the Fed’s mistakes … come crush it in the months ahead join the Power Income Trader community!

 

Call 1-888-872-3301 right now and speak to the Option Pit Customer Care Team to find out how…

 

Then have a great weekend and as always …

 

Live and Trade With Passion My Friend,

Griff