Greenwood Trading says that easing geopolitical tensions in Ukraine should help bring equity bulls back to the market after a torrid two weeks of selloffs and heightened uncertainty.
Russia ended warplane drills and military exercises with ground troops near its border with Ukraine and reignited hopes that negotiation will hopefully bring an end to hostilities.
Simeon Kwanda , who heads up macro-economic research at Greenwood Trading said, “Of course, America’s decision to provide limited, targeted air strikes in Iraq won’t help matters much.”
The US President, Barack Obama, authorized limited air strikes using drones and fighter planes on armored trucks and mortar positions belonging to Islamist militants fighting under the banner of the Islamic State, formerly ISIS (Islamic State in Iraq and Syria).
The fighting between Israel and Palestinian group Hamas has entered into an Egyptian-brokered peace deal which will hopefully end weeks of fighting which has claimed the lives of countless Palestinians including many children.
Greenwood Trading said it expects stocks to rally towards old highs but cautioned that there is little in the way of impetus or justification for new highs given the mixed signals emanating from the US Federal Reserve.
“The Fed’s clearly committed to removing the stimulus punch bowl and normalizing interest rates but investors are having a hard time seeing where the extra boost required to take stocks to the next level is going to come from especially when everyone knows that, despite the seemingly improving data, the economic recovery is highly dependent on that stimulus,” added Kwanda.
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