“The truth is sometimes a poor competitor in the marketplace of ideas—complicated, unsatisfying, full of dilemmas, always vulnerable to misinterpretation and abuse.” – George F. Kennan

Well, it certainly seems like we are in the thick of it, doesn’t it? If one of the more difficult transitions of Fed policy in response to rampant inflation weren’t enough, now it appears that the largest army assembled in Europe for many decades is about to unleash a potentially vicious invasion. As rates continue to rise in anticipation of tightening, so does the discount rate for stocks. Stocks that have a high proportion of future earnings comprising their net present value are particularly vulnerable. This is part of why high-flying stocks with poor results or guidance fell so hard this season. Geo-political events over the past century have tended to be non-events if you invest on a long enough time horizon for the most part, but when events affect, or may potentially affect, energy

supplies the results seem to be worse. Our  Head of Research, Tom Lee, will give you some specific stats on the market reactions to recent invasions.

Sentiment has reached very low levels. Forward guidance has dropped considerably more this quarter than last quarter. Economists have als...

Unlock this article with a FREE 30-Day Trial!

An FSI Pro, or FSI Macro subscription is required in order to access this content.

*Free trial available only on a monthly plan

Disclosures (show)

Get invaluable analysis of the market and stocks. Cancel at any time. Start Free Trial

Articles Read 2/2

🎁 Unlock 1 extra article by joining our Community!

You’ve reached your limit of 2 free monthly articles. Please enter your email to unlock 1 more articles.

Already have an account? Sign In

Don't Miss Out
First Month Free