Market Fallout Amid Russia-Ukraine Crisis: Analyst Comments
With financial markets around the world roiled as Russia attacks Ukraine, below are the reactions and commentaries from several of the analysts at Investing.com.
Get The Full Ray Dalio Series in PDF
Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues
Q4 2021 hedge fund letters, conferences and more
Why Mohnish Pabrai Sold Alibaba To Buy Tencent/Prosus
In the first quarter of 2021, a new position appeared in the US portfolio of Mohnish Pabrai’s Pabrai Investments. In recent years, the value investor has been investing heavily outside the US, as he has struggled to find any interesting North American opportunities for his portfolios. Q4 2021 hedge fund letters, conferences and more Yet, Read More
Investors Flee Risk-Related Assets
First off, comments on how investors might look to capitalize on defense company stocks amid the crisis from Jesse Cohen, senior analyst at Investing.com
“The crisis has exacerbated market jitters and investors are fleeing risk-related assets, such as high-growth tech stocks, and cryptocurrencies, and instead are heading towards the relative safety of the U.S. dollar and Treasurys.
“Further escalation in the ongoing geopolitical conflict would likely have a positive impact on the prices of defense sector stocks, such as Lockheed Martin and Raytheon, which supply the U.S. military and its NATO allies with fighter jets and advanced missile systems.
“I’d expect Lockheed Martin Corporation (NYSE:LMT) shares to continue their march higher in the weeks ahead — the stock has gained 8.6% so far in 2022 — considering the defense contractor’s position as a global manufacturing leader of an assortment of military goods and advanced technologies, which is, in addition to fighter jets, includes combat ships, hypersonic missiles, and missile defense systems. Our quantitative models point to a gain of roughly 32% in Lockheed stock from current levels over the next 12 months, bringing shares closer to their fair value of $510.90.
“As one of the leading global producers of missile defense systems, precision weapons, radars, and command and control systems, Raytheon Technologies Corp (NYSE:RTX) also appears to be a good option for investors looking to hedge against further geopolitical uncertainty in the weeks ahead. Again, our quantitative models suggest that Raytheon stock could see an increase of around 17% in the next 12 months, bringing it closer to its fair value of $109.43 per share.”
Large Cap Technology Stocks Can Withstand Russia’s Invasion Of Ukraine
Further analysis suggesting a focus large cap technology stocks, from Haris Anwar, U.S. markets analyst at Investing.com
“If you are a buy-and-hold investor, it makes sense to keep some solid, large cap technology stocks in your portfolio. These companies can withstand wars, recessions, or pandemics better than their smaller cap counterparts, thus providing safety during times of distress.
“During economic turmoil, which could potentially occur if the Federal Reserve begins to hike rates aggressively, or if Russian aggression in Europe continues to escalate, these corporate strengths are especially beneficial for investors, whether they’re in search of dividend yield or not.
“In addition to receiving income when you need it the most, large cap dividend stocks are also less mercurial. As such, their strong balance sheets, essential products and services, and extensive global footprint also result in reliable payouts.”
And finally, commentary on commodity fallouts from Pinchas Cohen, global markets analyst at Investing.com
“Gold surged by more than 3%, breaking the $1,950 level for the first time in 13 months. The yellow metal’s rise at the same time as a rally in the dollar demonstrates investors’ eagerness for safe havens as risk-appetite evaporated. During normal times, the two assets tend to have a negative correlation.
“Russia is a significant producer of many major commodities. Traders are worried that further sanctions likely to be imposed by the US, UK and Europe will lead to disruption in supplies of wheat, aluminum and copper for example, raising their prices yet further.
“Crude oil surged, hitting over $100 a barrel and continued volatility is expected. Energy markets were roiled on risks that Russian energy supplies will be disrupted, which may profoundly impact the market. Russia is the second largest oil exporter after Saudi Arabia and the world’s foremost natural gas producer. Crude broke out of a pennant and Brent hit over $105 while natural gas surged 4.25%.”
Updated on Feb 24, 2022, 5:04 pm