From the end of the agony

By 14/03/2022News

14.03.2022 – Hopes of a ceasefire are pushing up share prices. Perhaps the Ukraine war will soon be history. The stock market is already positioning itself in this direction. We let rather bullish investment banks have their say, who see light at the end of the tunnel.

On Friday, Goldman Sachs lowered its forecast for the current year – which, paradoxically, is still a moderately bullish assessment. The gold men lowered the outlook for the S&P 500 at the end of the year from 4,900 to 4,700 – which is, however, above the current level. There’s obviously a decision brewing in the SPX, as you can see in the daily chart.


JPMorgan even sees a push north in the short term and recently pointed to the dried up liquidity in the stock market. Specifically, “…if geopolitical news flow improves from here, we could be through worst of it”, but there is always a but…de risking and cumulative selling is still far from levels seen in March 2020 and Jan 2021…”. Thus, JPMorgan expects a $230 billion rebalancing out of bonds and into equities by the end of March. Investors are more overweight in cash than at any time since March 2020, it said.

Cash is waiting to be deployed

Indeed, according to data from analyst firm Refinitiv Lipper, investors pulled out a total of $5.4 billion in the week ending March 09 alone – the largest weekly exodus of capital since April 2020. And that’s exactly when the Corona Crash occurred on the stock markets. And after the bear market, things went up sharply. So maybe stock market history is repeating itself.

Recession largely priced in

However, large daily swings would continue for the time being, JPM further judged. In Europe, 80 percent of a recession is priced in, in the U.S. a maximum of 50 percent. By this is probably meant that in the U.S. because of recession fears could still go a bit further down than in Europe. But probably not much more.


Our conclusion: If there is a sustainable ceasefire in Ukraine, prices will continue to rise. Realistically, politicians and business leaders will then make pilgrimages to Moscow again. The biggest bullish event would be the victory of Ukraine, a withdrawal of the Russians plus an elimination of the Putin regime through a coup in Moscow. That seems rather unlikely at present. Bernstein Bank is keeping an eye on the matter for you.


Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.