Thursday, February 24, 2022

"Stock Market Crash Spark Chaos As The Biggest World Conflict Has Begun"

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"Stock Market Crash Spark Chaos As The 
Biggest World Conflict Has Begun"
by Epic Economist

"A Massive Stock Market Crash Has Begun! Stock markets are crashing all around the world as recente events threaten to spark catastrophic consequences for the lives of millions and hamper the global economy. In the United States, major indexes fell sharply today following an already tumultuous week on Wall Street. On the other hand, gold prices soared to $1970 an ounce, nearing a one-year high as traders rush towards safe-haven plays amid the news. And given that Russia is the world’s largest natural gas exporter, fears of other energy-linked sanctions fueled a major spike in oil prices. Crude oil and Brent crude hit a seven-year high and went above $100 per barrel.

Bubbly and risky assets continued to be slammed in U.S. markets throughout the day, as investors pondered the financial market implications of worsening global stress and greater sanctions. The escalation of the conflict is adding pressure on investors already grappling with a monetary policy shift as the central bank intervenes more aggressively in an attempt to alleviate inflation. The worsening tensions threaten to exacerbate already surging prices and spark other economic disruptions that could significantly complicate things on the financial markets.

In other words, the impact of the confrontation will likely unleash higher inflation all around the world by driving the price of food and energy to unprecedented levels, slowing down global manufacturing, causing further shortages, and grinding the global economy to a halt. Of course, the Russian stock market crash sent shockwaves all the way through the U.S. stock market, where conditions were already extremely volatile. As the spike in energy prices sent investors fleeing for the safety of fixed income assets, several corners of the market sank in a sea of red. But the real carnage was in the tech sector, where speculators got burned.

Many other big Wall Street banks and financial institutions are warning about more turbulence in the foreseeable future. “We’re going to see a lot of volatility in the weeks ahead because the situation is by no means clear,” said Aoifinn Devitt, chief investment officer at Moneta, referring to the geopolitical tensions.

Similarly, Goldman Sachs economists pointed out that “with some signs of problematic wage-price dynamics emerging and near-term inflation expectations already high, further increases in commodity prices might be more worrisome than usual” . However, that will not stop the Fed from hiking interest rates and adding more pressure on the markets, according to Goldman. A massive bubble burst seems inevitable in this scenario, and things continue to deteriorate by the day.

Deutsche Bank’s chief U.S. equity and global strategist Binky Chadha said that the invasion was “really worse than a baseline expectation that the bank had or the markets had,” he argues that if indexes drop another 4% to 5% in the coming days that would account for a 20% overall loss, which put the U.S. stock market effectively into bear market territory.

On the same note, strategists at Morgan Stanley led by Michael Wilson said that even though investors have been focused on rising global tensions over the past few weeks, signs of slowing economic growth are no less dangerous. The bank’s earnings model projects “a meaningful deceleration in economic growth in the coming months,” they wrote in a note, adding that earnings revisions breath trends have also been slowing. “All of that is a confluence of really negative factors that’s weighing on the markets here,” Anastasia Amoroso, chief investment strategist outlined in an interview with Bloomberg TV.

To make things worse, elite investors on Wall Street are saying that there’s no way to reverse such a deep downfall, and now the market is on track to “undergo a cataclysmic shift — and many won't survive the washout”. “This is not a drill. It's the beginning of a bear market,” they highlighted in an op-ed released to the public on the Insider website. And the outlook isn’t gloomy just for investors. This is just the beginning of a brutal crisis that will affect each and every one of us. And when everything starts to fall apart all at once, an avalanche of events will bring us right back into recession, and possibly spark a modern-day depression. At the end of the day, it’s the average person who will suffer the most."

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