I have to say this
As long as the war in Ukraine continues, the Fed is less likely to dramatically raise borrowing costs, which is very helpful to the outlook of our highly leveraged tech growth sector.
The big takeaway from the last week has been reinforcement. Reinforcement on why US stocks trade at a premium to every other country. While we will face the consequences down the road, the US demonstrated its position on the world stage. Overnight, a country’s economic standing has been thrown off a cliff, one who thought they were prepared for everything (and gloating about it).
Russia / Ukraine has very little industry outside of natural resources. The spike in oil will have a direct impact on the amount of surplus cash folk’s have after spending at the pump’s and this will have a direct impact on consumer spending habbit’s and enable our supply chains to catchup.
As a result, I foresee capital fleeing emerging markets (including China ADR’s) and finding a home in US Growth Stock’s / FAANG. These provide the yield investors are used to with very minimal currency risk.
TLDR: As long as the fighting continues, the FED won’t raise rates drastically. High oil prices naturally lower consumer demand (less spare cash) and enable supply chains to catch up.
Submitted March 01, 2022 at 11:30PM by Jerome_BRRR_Powell
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