March 15, 2022, 3:33 pm EDT
Rally After the Cease-Fire Agreement
The stock market rallies 600+ points in the Dow Jones index and 2-3% gains for S&P 500 and Nasdaq after the cease-fire agreement between Russia and Ukraine. The brutal bombing and fighting in Ukraine from Rissuan’s invasion already caused lots of death and destruction. Millions of refugees, mostly women, children, and the elderly, ran neighboring countries for survival. It is highly questionable that this agreement will work but it gave the stock market a chance to jump.
The lowering of crude oil prices stirs up energy-sensitive stocks including airliners (AAL, DAL, UAL, LUV), cruises (NCLH), and transport (UPS). Technology stocks also rebound after weeks of weakness: MPWR, AMD, NVDA, TSLA, MSFT.
Rates hike is to be announced tomorrow from the two-day FOMC meeting. A minor hike (0.25%) could also carry the stock market higher. A stronger (0.5%+) rate or hawkish statements on inflation could add more pressure for the stock markets.
Although we do not know the outcome of the war or rates, we are less optimistic about the direction of the stock markets for 2022 or even 2023. We believe the rebound could be temporary. It is simply to prepare a stage for the next wave of sell-off.