[The Epoch Times, February 23, 2022](Comprehensive report by The Epoch Times reporter Zhang Dongguang) In recent days,US stocksIt fell almost every day. The main fuse was that Western countries were worried that Russia had assembled 100,000 troops on the border and could invade Ukraine at any time. Putin’s recent declaration of recognizing the separatist regions of Ukraine and the east as an independent country caused an international uproar, so the Biden administration began.Sanctions on RussiaLarge banks, the United Kingdom, and the European Union have also successively imposed economic sanctions against Russia, which has made investors’ panic in selling stocks unabated.
Tuesday,US stocksThe three major indexes fell for the fourth consecutive day. The Dow fell 483 points or 1.42%, and fell more than 700 points during the session. The S&P 500 closed down 1.01%, and has fallen 10.25% since its peak, falling into the correction area. The Nasdaq It fell 1.23%. Goldman Sachs recently said that if Russia actually invaded Ukraine, the S&P index would fall by 6%, which deepened investor panic.
However, the VIX panic index, which represents the market’s panic, rose 3.8% on Tuesday to close at 28.81 points, rebounding sharply from its intraday peak of 31.42 points. International oil prices, which are closely related to geopolitical tensions, also experienced large one-day profit-taking and selling pressure. West Texas crude oil once rose to US$94.5/barrel, but closed down 1.2% to US$91.6.althoughUkraine crisisThe intensification, but the two indicators are below the peaks set on February 14, underscoring speculators believe that the panic caused by the Ukraine crisis will gradually fade.
Ukraine crisisThe delay in cleaning up has complicated the Fed’s monetary policy, which was originally hawkish. Previously, the futures market had expected that the probability of the Fed raising interest rates by 2 yards after the March policy meeting could be as high as 60%. The latest probability has been reduced to 31.8%. This means that as geopolitical risks rise, the market expects the Fed to adopt a more dovish tightening stance to avoid falsely triggering a recession.
But on the other hand, since the Ukraine crisis has intensified, the international oil price has risen by about 10 to 15 US dollars per barrel, and the US gasoline price has risen by about 30 to 40 cents per gallon, which will increase the price increase rate in January this year. Inflation, a 40-year high of 7.5%, has worsened. According to the American Automobile Association (AAA), gasoline prices have risen by 50% in a year.
“We believe that any Russia-Ukraine panic will be short-lived, and we do not recommend that investors sell out during this panic,” Tom Lee, a well-known Wall Street investment expert and former JPMorgan Chase strategist, wrote in a report on Tuesday (22nd). Stocks.” He insisted that the stock market would surge again in the second half of the year, and warned investors not to sell their holdings amid geopolitical panic.
Tom Lee believes that past experience has found that the stock price falls on the eve of a military invasion, but the stock price will start to rebound when the invasion really occurs. He advocates that investors should buy the invasion when the news panics.
He also said that U.S. companies’ exposure to Russia is low, and the impact on corporate earnings is low, but stock prices have already plummeted due to geopolitical panic. In addition, the outbreak of the Omicron variant virus has gradually receded, and the economy and consumption will surge again. Based on this, he advocated that the U.S. stock market, which had a rough first half of this year, will rebound strongly in the second half of the year.
According to FactSet, 78% of the S&P 500 companies that have reported fourth-quarter earnings so far have beaten expectations on revenue and earnings, indicating that business operations are still doing well so far.
For the S&P 500 index, which has fallen by about 9% this year, the performance is quite unsatisfactory. Tom Lee explained that this means that the stock price has greatly reflected the negative interest of the Fed’s active interest rate hike in 2022.
Responsible editor: Ye Ziwei#