“Fed hikes are coming; inflation is out of control and geographical tensions are high.” James Bullard, St Louis Fed President told Steve Liesman of CNBC on Monday. As we speak that is the current outward outlook of the US Stock Market Industry. However, it will depend on how you will view each predicament as an investor. As the sages said, you can view a glass of water as half empty or have full.
Due to that reality, yesterday, all the 3 major US indexes stayed at red for the second day. Dow Jones Industrial Average lost 171.89 points (-0.49%), finally tarrying at 34, 566.17. S&P 500 incurred a loss of 16.97 points (0.38%) finishing at 4,401.67. The tech-heavy NASDAQ almost recorded a flat trendline but went down by 0.24 points (0.00%) rallying at 13,790.92.
Needless to say, the negative indexes that we are witnessing daily are the results of the current Russia & Ukraine conflict. According to Reuters, Moscow has deployed more than 1000 troops across the Ukraine-Russia border and also around nearby Belarus. In response, the President of France said European Union is ready to enforce foreign sanctions on Russia. Nevertheless, this type of news doesn’t sit well with Wall Street Market.
Across the Arctic Ocean, Biden’s administration through Antony Blinken, the secretary of State has directed the relocation of the US embassy from Kyiv, to Lviv, another safer city in Ukraine. It is a noble idea, first to protect the lives of citizens. On the other hand, due to Russia/Ukraine crisis, energy companies are one of the major weights trembling the Equity Market.
However, we thought the market will leap from the development of post-pandemic policies in 2022. For instance, European Union recently lifted travels restrictions. They did away with the regular testing and mandatory quarantine even for vaccinated fliers. Nevertheless, Airbnb and Visa will enjoy the fruits of the new traveling directives.
For example, Airbnb (NASDAQ: ABNB) will directly benefit from the travellers that are booking alternative facilities for accommodations. Arguably, Airbnb is one of the travel stocks that we would like to add to our long-time portfolios. Although, ABNB shares have been down in the entire 2021 due to travel sanctions. Despite that, according to Bloomberg analysis, ABNB revenue will grow by 3% -7% in 2022.
Also, Visa (NYSE: V) is another stock that is set to make a notable rebound following the lifting of international travels restrictions. As narrated by Haris Anwar of investing.com, Visa stocks are in a pole position to benefit from the recent EU travel directives. Although, Visa’s stocks ticked upward to $250 per share last summer, on Friday, NYSE: V closed down by 10% to $224.69.
In relation to what is happening on Wall Street, a keen observer will disclose to you that; when the indexes are dropping, treasury bonds surge. Also, John Lynch, Chief investment officer of Comerica Wealth Management commented that “despite recent volatility in interest rates and equities, areas of the fixed market have exhibited less turbulence.” No wonder, the 10-year Treasury yield rose by 1.9% on Monday.
