News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
S&P 500 Forecast: Invasions Have Often Been Bullish

S&P 500 Forecast: Invasions Have Often Been Bullish

Justin McQueen, Strategist

S&P 500, USD Analysis

  • Gold & Oil Reverse Spike
  • Invasions Have Often Been Bullish for the S&P 500
  • USD Pullback May See Demand Return To High-Beta Currencies
  • Agile Trading to Persist as Russia/Ukraine Conflict Remains a Fluid Situation

Financial markets remain fixated on the fluid situation in Ukraine. Meanwhile, investors will be also assessing the impact of sanctions announced by Western governments and the likely soon to be announced retaliatory measures by Russia. That said, yesterday’s dramatic repricing across global markets did have a feel of reaching peak panic with notable Russia/Ukraine conflict indicators, gold and oil both posting sizeable pullbacks from earlier highs.

S&P 500 Forecast: Invasions Have Often Been Bullish

Source: Refinitiv

Elsewhere, US equities bounced back from the Wall Street open with the S&P 500 gaining 1.5%. As shown below, geopolitical events have often been short term in nature, with markets posting a full recovery in the subsequent 4-5 weeks. In fact, invasions of the past have tended to present an opportunity for bulls.

S&P 500 Performance During Geopolitical Risk Events

0 = Date of Invasion/US Intervention

S&P 500 Forecast: Invasions Have Often Been Bullish

The recovery in risk appetite has also been evidenced within the FX space, with cross-JPY on the front foot, alongside, high beta-currencies. I believe there was an element of month-end USD buying that exacerbated much of the downside in major USD pairs, most notably GBP, given the timing of the reversal, which came right after the Ldn 4 pm fix. Going forward, I lean towards an extended recovery in high-betas such as the AUD and CAD.

US Dollar Chart: 10-Minute Time Frame

S&P 500 Forecast: Invasions Have Often Been Bullish

Source: Refinitiv

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES