With the intensifying conflict between Russia and Ukraine, the S & P 500 has entered an adjustment phase and the tech-rich Nasdaq has entered a bear market. However, some analysts say that, looking back on history, market pressures should be short-lived.
Dan Ives, an analyst at Wedbush Securities, said on February 24 that Russia’s declaration of military action against Ukraine increased pressure on stock prices and “significantly worsened” the market environment.
But Ives said the geopolitical shock “doesn’t panic,” and a similar plunge since 2000 is “a buying opportunity for big, profitable tech stocks like Microsoft, Apple, and Adobe.” It was. ” Earlier this week, Bank of America analysts said a similar view.
LPL Financial strategist Ryan Detrick agreed with this view, noting that markets were often recovering from several geopolitical shocks in the past, often within a few weeks.
After the 9/11 terrorist attacks, the S & P 500 plunged nearly 12% in 11 days, recovering its losses a month later, despite the US’s war. During the Cuban Missile Crisis of 1962, the S & P 500 plunged nearly 7% in one day, but recovered its losses in four days.
In addition, the S & P 500 plunged 19.8% in half a year during the Japanese attack on Pearl Harbor in December 1941, the biggest geopolitical shock in history, despite a four-year protracted war. , The index recovered in 307 days.
“The good news is that geopolitical influences tend to be short-lived, one to three months,” said Lindsay Bell of Ally Invest on the 24th. Historically, 12 months of such an event. Later the market turned up. “
However, there are also voices that investors should be cautious. “History gives us clues, but it doesn’t guarantee what will happen,” said Sam Stoball of CFRA Research. “If the market shows signs of recovery in the coming days or weeks, the adjustments may have come to an end, but if not, a new bear market may arrive,” he said. Pointed out.
