The market is retesting the stock market lows from earlier this month. We will find out soon if those lows will hold or if we need to do more work to the downside. The Russian invasion of Ukraine has the markets on edge. There are some longer-term financial issues from Russia’s aggression towards its neighbors.
It is important to note that Russia’s economy is a relatively small one. However, they do control a lot of natural resources. This will increase are inflation. We do need to meet the gap caused by this invasion with more natural gas production. We should be stepping up our energy production while we create more sustainable options.
There is no doubt that the crisis will continue to put pressure on markets, I believe most of the damage to the markets probably already occurred. I’m writing this during market hours, however, I still believe we will mark these lows and start to move back up later today or tomorrow. However, expect choppy and difficult markets through the first half of the year.
Does the Russian invasion pressure the Fed to delay a tightening of monetary policy? That’s an excellent question and we will see what comes from the Fed. It’s hard for me to imagine that they will be overly restrictive in the face of a global crisis.
The views stated in this letter are not necessarily the opinion of Cetera Advisor Networks LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.