“The world has changed. I feel it in the water. I feel it in the earth. I feel it in the air. Much of what was lost, because now no one remembers it. It all began with the forging of the great rings. Three were given to the elves, the most wise and loyal immor- tal beings of all. Seven to the kings of the dwarfs, great miners and builders of cities in the mountains. And nine, nine Rings were given to the race of men who more than anything want power. Because in these rings were sealed the strength and the will to govern all races. But all of them were deceived, because another ring was created. In the land of Mordor, in the flames of Mount Fato, Sauron, the Dark Lord, secretly forged a Sovereign Ring, to control all the others and in this ring poured out his cruelty, his wickedness and his will to dominate every form of life: a Ring to rule them all.” (Lady Galadriel)

“A wizard is never late, Frodo Baggins. Nor is he early. He arrives precisely when he means to.” (Gandalf)

From The Lord of the Rings - The Fellowship of the Ring” a film by Peter Jackson.

The Trump Road Map continues. After the success achieved with Korea, the American president feels and is stronger. Raise your voice and now also screams against the “friends” of all time: Europe. During a rally in Michigan the US president said: “You know the European Union looks so beautiful, and you know why? They created the EU to take advantage of the United States.” Trump went on to say that he will stop at nothing to denounce the imbalance he previously spoke against. He also announced that there may be temporary setbacks for the US economy, but in view of a bright future. From the thaw to the edge of a commercial war, three leaders of the Old Continent (Macron, May, and Merkel) have let Trump know that they will “react” if the EU is included in the new tariffs on imports of aluminum and steel.

The European Commissioner for Trade, Cecilia Malmström, will make a last attempt at dialogue with American counterparts to avoid the explosion of a trade war after the empty visits to Washington by the same Macron and Merkel. The US has extended another month, the deadline for deciding whether to exempt old Europe from the tariffs that shake international relations. But more than an extension, it seems an ultimatum. In the background there is the crises between the US and China, the conflict over supremacy in 5G, the crisis of the Russian oligarchs buried by sanctions.

Trump achieved a diplomatic victory with North Korea. It is impossible to know what the diplomats treated. But Europe, China, and Russia are quite another thing. It is not a question of power. As The Lord of the Rings teaches, it is not a clash between big or small powers. Openness, commercial exchanges, do not serve to measure how much stronger, in terms of commercial balance, one nation than another, but how many advantages each nation has in remaining open or closed.

It can be in commercial imbalance, but thanks to this we continue to have strong growth rates, because we import technologies that are no longer worth producing at home. Trump’s ban on chip and 5G technology will slow down US development. Tomorrow, thanks to these bans, a com- pany will be born in the US that produces chips for the 5G but will be more expensive than the Chinese ones without duties. This is globalization— it is not a struggle for power. In this scenario, we must read the phase of normalization, the slow but gradual, decisive march of all central banks to bring the economy back on tracks that are always balanced and equidistant. Today, the sovereign bond yields and the risk is not balanced and equidistant and is creating, as the International Monetary Fund of Imbalances warns.

The movements are so small, the steps of central banks and markets, so measured that it almost seems not to notice. But the 10-year Treasury touched the 3% barrier. US inflation, Pce, the Fed’s favorite, is 2%. Everything seems still, and everything is moving. As the wise Gandalf said: “A wizard is never late. Nor is he early. He arrives precisely when he means to”.

We must be wizards on the stock exchange. Timing is everything. Although it is not so obvious, normalization is taking place. It is one of the most difficult routes, one has to move like the equilibrists, because the markets are based on expectations and if something does not work like everything we will be overwhelmed by strong jolts. The bubbles do not have vent valves. It is therefore necessary to move with le- aden feet. Or how, we try, analyzing the numbers up to the smallest details. The US tech have still amazed with quarter- ly decidedly above expectations. For Facebook, spying on friends has paid off. Apple runs. But even on the currency front, the dollar tries to return to normal, catching up on both the yen and the euro.

One of the first lessons learned in the stock market is that power does not matter. Today you are a bluechip, but if you have not continued investing, you may not be here tomorrow. The important thing is to know how to read the market, where it moves, even when everything seems to be still.