March 21, 2022, 1:55 pm EDT
A Bearish Tone
Although markets gave a 4-day rebound last week, it is likely to fail as a bearish tone given today. Both the Russia-Ukraine war and the Fed rate hike policy on a market-friendly approach with only a 0.25% increase were to be criticized for out-of-control inflation. Therefore, the stock market issues red color for all major indexes with more than -1% down as of now.
This bearish tone reflects the disappointing outcomes of both the war and rates when looking into deeper their coming problems. In general, both problems appear to become more severe and widespread for months to come.
The soft actions from the US and NATO gave Russia much encouragement to use more fatal weapons including ultrasonic missiles and a nuclear bomb. Therefore, we can see rising prices for energy: OXY, MRO +8%, XOM, EOG +5%, material AA +9%, NUE +5%, CCJ +7% and precious metal NEM +3%.
The slow pace of rate hike put more pressure on commodities including the above and others: fertilizer MOS +7%, CF +6%, NTR +5%, agriculture equipment makers DE, AGCO.
As we can see the disaster and inflation both push for a more difficult future for most people in the world. The direction for the near future is not getting better as the result of world leaders from all major countries and continents: the US, Europe, Russia, and China. For example, the last Friday meeting between Biden and Xi simply made things much worse, not better.
There are few investment opportunities as mentioned above. However, the overall bearish tone could get a spike up when more bad news surfaced.
Please ensure your investment and household safety are prepared for it.