The Russia-Ukraine Crisis May Not Be What Plagues The Market

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The Russia-Ukraine Crisis May Not Be What Plagues The Market

seekingalpha2022-02-22

ErikMandre/iStock via Getty ImagesOne would think that the geopolitical tensions between Ukraine and Russia are sure to weigh on markets over the near term as investors try to handicap the potential ...

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Alyting
·2022-02-22
True
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AlphaSpiker
·2022-02-22
Here comes the bear
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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nThe Russia-Ukraine Crisis May Not Be What Plagues The Market\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-02-22 10:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4488859-the-russia-ukraine-crisis-may-not-be-what-plagues-the-market><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>ErikMandre/iStock via Getty ImagesOne would think that the geopolitical tensions between Ukraine and Russia are sure to weigh on markets over the near term as investors try to handicap the potential ...</p>\n\n<a href=\"https://seekingalpha.com/article/4488859-the-russia-ukraine-crisis-may-not-be-what-plagues-the-market\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4544","symbol_name":"ARK ETF合集","start_time":0,"source_url":"https://seekingalpha.com/article/4488859-the-russia-ukraine-crisis-may-not-be-what-plagues-the-market","article_id":"2213808039","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2213808039","pubTimestamp":1645497000,"columns":[],"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"ErikMandre/iStock via Getty ImagesOne would think that the geopolitical tensions between Ukraine and","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4544":"ARK ETF合集","ARKK":"ARK Innovation ETF"},"translate_title":"俄乌危机可能不是困扰市场的因素","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"ARKK":1},"content_text":"ErikMandre/iStock via Getty ImagesOne would think that the geopolitical tensions between Ukraine and Russia are sure to weigh on markets over the near term as investors try to handicap the potential impacts and uncertainty that comes with it. However, there may be more stirring beneath the surface, and it may not be the conflict sending stocks lower but the Fed and their very hawkish rhetoric. Conflict It would certainly seem like the conflict is sending stocks lower. On Feb. 11, tensions between Russia and Ukraine were rising, sending the S&P 500 down by around 1.9%. Then on Feb. 15, the headlines turned more optimistic, suggesting tensions had eased some, resulting in the index rising by approximately 1.6%. However, by Feb. 17, headlines again grew more worrisome, resulting in the index dropping by 2.1%.   TradingViewBut what's interesting is that when Russia invaded Crimea in February 2014, there hardly seemed to be a market reaction. While the markets did fall in January 2014, most of those concerns came from slowing growth in the US and China. After that sharp decline in January and early February, markets went on to race higher.\n   TradingViewThere's no doubting the conflict is terrible, and it does have the potential to impact oil and gas prices and put more inflationary pressure on the global economy. However, other asset classes do not seem overly concerned with the conflict between Russia and Ukraine. Flight to Safety? The dollar index has not seen a meaningful flight to safety and has been steadily hanging around 96. Additionally, risk-on currency pairs like the Australian dollar to Japanese Yen have traded sideways since the beginning of February. One would expect the yen to strengthen against the Australian dollar in a risk-off situation, like during the COVID crash.   TradingViewEven the euro to yen currency pair has been relatively neutral. While the yen has strengthened some against the euro in recent days, it has essentially been range-bound for several weeks.   TradingViewThere hasn't even been a meaningful flight to safety in the US 10-year yield, which has fallen by just ten basis points. Indeed not what one expects if the markets were in a full-blown risk-off mode.   TradingViewWhile this could certainly change in the coming days, there has not been a significant flight to safety yet. It isn't to say that conflict isn't severe because it is. But from a market perspective, the typical flight to safety risk-off signs are not present, which tells us that there may very well be something else taking place in the stock market. The Fed It may be the markets are ultimately more concerned over the Fed. A lot of the newsflow regarding Russia has occurred around the same time as news out of the Fed and its governors. For example, over the past week, St. Louis Fed governor Jim Bullard talked up the idea of an unscheduled FOMC meeting and the need to push interest rates above the neutral rate to cool inflation. The neutral rate is where Fed policy has no impact on the economy. Meanwhile, Cleveland Fed governor Loretta Mester is talking about removing forward guidance.  On Feb. 10, the markets saw a hotter than expected CPI report, which sent the 2-Year rate up 22 bps. Then on Feb. 11, around 12:45 PM, Jim Bullard noted he favored hiking rates 100 bps by July, something the market was unprepared for and sent the markets sharply lower. After that comment, the market took a noticeable move down.   TradingViewAs mentioned on Feb. 17 in a nightly commentary I write for my SA followers in a blog post, that day's selling happened after a very lousy 30-Yr TIP auction at 1:00 PM eastern. Before the selling began at 1 PM, Jim Bullard had made comments about the unscheduled FOMC meeting.\n   TradingviewWhen diving through the data in a lot more depth, it seems that the market may be using the Russia/Ukraine headlines to cover up what's plaguing it, which is nervousness around an overly aggressive Fed. It would explain why there hasn't been a meaningful flight to safety and why currency pairs such as the euro, yen, and Australian dollar have not seen material moves, along with rates. Tech Wreck It may also help explain why those higher beta growth names have been hit particularly hard over the past few weeks. Look at the Ark Innovation Fund ETF (ARKK), which fell nearly 10% just last week. The portfolios' stocks seem to have little to do with Russia and Ukraine or oil and anything related to the conflict. Those stocks would be much more impacted with a changing monetary policy stance here in the US.   TradingViewWhile the situation can change at a moment's notice, at this point, the Russia and Ukraine crisis may be serving as cover for concerns of a Fed that's no longer supporting the market.","kind":"news","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9097455148,"gmtCreate":1645540626045,"gmtModify":1676534037463,"author":{"id":"3576326971308345","authorId":"3576326971308345","name":"Alyting","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":5,"crmLevelSwitch":0,"idStr":"3576326971308345","authorIdStr":"3576326971308345"},"htmlText":"True","listText":"True","text":"True","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9097455148","repostId":2213808039,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9097585248,"gmtCreate":1645498883606,"gmtModify":1676534033815,"author":{"id":"3573008930783156","authorId":"3573008930783156","name":"AlphaSpiker","avatar":"https://static.tigerbbs.com/7bf4e96af844a7e9da5720d6045b3532","vip":1,"crmLevel":6,"crmLevelSwitch":1,"idStr":"3573008930783156","authorIdStr":"3573008930783156"},"htmlText":"Here comes the bear","listText":"Here comes the bear","text":"Here comes the bear","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9097585248","repostId":2213808039,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":1,"commentSize":2,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}