Markets reflect economic and political landscapes. Macro and microeconomic factors can influence the path of least resistance of prices of assets across all asset classes. Domestic and geopolitical events can equally impact price trends.
In early 2022, markets face escalating inflationary pressures in the US and worldwide. The global pandemic has caused supply chain bottlenecks, labor shortages, and other issues that will cause COVID-19’s financial legacy to last for years, if not decades. The levels of central bank liquidity and government stimulus since early 2020 have lit an inflationary fuse that will be challenging to extinguish.
Meanwhile, in early 2022, the world faces a host of potential geopolitical problems that could cause sudden and violent moves in many financial and raw materials markets. While the stock market is focused on inflation and economics, it could be politics that blindside investors and traders over the coming months.
China – US relations have deteriorated
Trade issues continue to divide the world’s two leading economies
The US opposes China’s expansionary desires in Taiwan and the South China Sea
China resents US interference with its domestic human rights issues
Russia – US relations are even worse
The US and NATO have warned Russia over any incursions into Ukraine
Russian troops have amassed at the Ukraine border
President Putin makes no secret of his desire to reassemble the USSR block of countries under the Russian umbrella
The potential for hostilities between the US and Russia is at the highest level in decades
Last week’s attempt at a diplomatic resolution seems to have gone nowhere
Iran remains a threat in the Middle East
Iran continues to enrich uranium at its nuclear facilities
There is no nuclear non-proliferation agreement in place
Iran continues to call for the destruction of the US and Israel
Iran and Saudi Arabia remain mortal enemies in the Middle East
North Korea has been testing missiles
Kim Jung Un has been testing rockets, threatening South Korea and Japan
US presence in South Korea and Asia present another potential flashpoint between the US and China
North Korea continues to provoke the Biden administration
The most extreme market volatility tends to come from the most unexpected events
The global pandemic that came from out of the blue is the perfect example
The financial world is focused on the Fed, inflation, interest rates
Price action in markets reflect the economic and political landscapes
Keep your eyes open – Geopolitical events could ignite significant market volatility over the coming weeks and months
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To say the current situation isn’t pretty now seems an understatement, and it’s likely to remain chaotic for a while. Which is why it’s so important for leaders of all kinds not to fall prey to the very human tendency to go negative.
Two of the biggest acquisitions in the industry confirm a trend in pharma M&A: The big players are trawling for opportunities in the rare-disease space.
Bargain-hunting friends of mine have been asking: “Should I buy First Republic?” After all, First Republic is prestigious. Facebook founder Mark Zuckerberg got a mortgage there. Dozens of customer surveys rate its satisfaction scores higher than super-brands like Apple and Ritz-Carlton.
The implications of the dollar potentially losing its status as the global reserve are numerous. Obviously, there may be currency risks, and decreased demand for U.S. Treasuries could lead to rising interest rates. I would also expect to see massive commodity price swings.
Many of us economy-watchers have been expecting recession, though with significant differences on odds and timing. Regardless, recent banking developments just made recession more likely and may have accelerated its onset.
Global Politics Could Drive Extreme Market Volatility in 2022
By Tradier Inc.
Image source: PIRO4D / Pixabay
Markets reflect economic and political landscapes. Macro and microeconomic factors can influence the path of least resistance of prices of assets across all asset classes. Domestic and geopolitical events can equally impact price trends.
In early 2022, markets face escalating inflationary pressures in the US and worldwide. The global pandemic has caused supply chain bottlenecks, labor shortages, and other issues that will cause COVID-19’s financial legacy to last for years, if not decades. The levels of central bank liquidity and government stimulus since early 2020 have lit an inflationary fuse that will be challenging to extinguish.
Meanwhile, in early 2022, the world faces a host of potential geopolitical problems that could cause sudden and violent moves in many financial and raw materials markets. While the stock market is focused on inflation and economics, it could be politics that blindside investors and traders over the coming months.
China – US relations have deteriorated
Russia – US relations are even worse
Iran remains a threat in the Middle East
North Korea has been testing missiles
The most extreme market volatility tends to come from the most unexpected events
Thanks for reading, and stay tuned for the next edition of the Tradier Rundown!
Click Here to see why active traders use Tradier Inc.
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Equities News Contributor: Tradier Inc.
Source: Equities News
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