Russia-Ukraine situation sparks U.S. stock turmoil, analysts warn of risks
Credit investors are in a "sell what you can" mood in an environment of rising rates and political tensions, a Bank of America Corp. survey showed, with Goldman Sachs Group Inc. strategists telling clients to switch to cash.
[Morgan Stanley's Wilson Says Potential Ukraine War a "Polar Vortex" Risk to Stocks]
A war "materially increases the odds of a polar vortex for the economy and earnings," $Morgan Stanley(MS.US$'s chief U.S. equity strategist Michael Wilson wrote in a note to clients.
Wilson, who has persistently warned that U.S. equity markets are heading for a correction and has the lowest year-end target for the S&P 500 index out of all strategists surveyed by Bloomberg, said Monday that investors will soon shift their focus from inflation to economic growth.
[Credit investors are in a "sell what you can" mood in an environment of rising rates and political tensions, according to Bank of America Corp.]
The net overweight position in investment-grade credit has dropped to 16%, the lowest since February 2019, as investors slash bullish bets on bank bonds and boost cash levels, according to $Bank of America(BAC.US$ 's latest European investor survey.
"Investors are still terrified over central bank policy errors after a decade of financial repression," Bank of America strategists said in a note, adding that investors classed it as the No. 1 risk for the third straight survey.
[Market pullback will be worse than Crimea if Russia invades, Goldman Sachs says]
The hit to stock markets from a potential Russian invasion of Ukraine would be worse than that seen after the annexation of Crimea in 2014, according to $Goldman Sachs(GS.US$ Chief Global Equity Strategist Peter Oppenheimer.
Global stocks tumbled on Monday as fears of an imminent invasion intensified, with a number of countries urging citizens to flee Ukraine. U.S. President Joe Biden’s national security advisor Jake Sullivan warned on Sunday that an incursion could come "any day now," and Ukraine has requested a meeting with Russia within 48 hours.
Source: Bloomberg
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