# Investors seek bargains as Ukraine keeps markets on edge Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-03-01 Category: INVESTING Category URL: https://financedigest.com/category/investing Meta Title: Money Managers Seek Bargains Amidst Global Market Crisis Meta Description: Discover how money managers are searching for investment bargains in the midst of global market upheaval caused by unprecedented Western sanctions on Russia, URL: https://financedigest.com/investors-seek-bargains-as-ukraine-keeps-markets-on-edgehtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-02-28t205617z2lynxmpei1r14jrtroptp4ukraine-crisis-investors-1736816103605-compressed.jpg) By Sujata Rao and Lewis Krauskopf LONDON/NEW YORK (Reuters) -Money managers are scanning roiled global markets for bargains after unprecedented Western sanctions propelled Russia into a full-blown crisis, sent oil prices soaring and put monetary policy bets in flux. The wild gyrations that have been a hallmark of markets in recent weeks continued on Monday, as the rouble lost nearly a third of its value, investors sought safety in government bonds and the dollar and major indexes in Europe and the United States pared initial sharp losses. Though few expect the volatility to quiet down anytime soon, some were looking for opportunities in [stocks they believe may have grown cheap after a weeks-long selloff](https://www.financedigest.com/asian-stocks-edge-up-before-u-s-jobs-data-defying-wall-street-selloff.html "Asian stocks edge up before U.S. jobs data, defying Wall Street selloff") that has taken the S&P 500 down 8% in 2022 and shaved 7% off Europe’s STOXX 600, as they bet that strong earnings will buoy stock prices. On a fundamental basis the world economy is in reasonable shape, earnings are strong and we are not expecting a (global) recession,” said Fahad Kamal, [chief investment officer](https://www.financedigest.com/host-analytics-appoints-chris-labruna-as-chief-revenue-officer.html "Host Analytics Appoints Chris LaBruna as Chief Revenue Officer") at Kleinwort Hambros. The range of outcomes is very wide but in the long run we [invest based on several metrics](https://www.financedigest.com/camradata-publishes-responsible-investing-roundtable-the-metric-for-success-a-new-white-paper-for-investors-and-asset-managers.html "CAMRADATA publishes ‘Responsible Investing Roundtable – ‘The metric for success?’ – a new white paper for investors and asset managers") … Those things do not scream panic,” he said. The S&P 500 recently [traded at around 19.7 times](https://www.financedigest.com/how-to-use-algorithms-to-save-time-and-make-money-when-trading-currency-crypto-shares-etc.html "How to use algorithms to save time and make money when trading (currency, crypto, shares etc)") forward earnings, from around 22 times at the beginning of the year after losing more than $3 trillion in value year-to-date. Data from Refinitiv also indicates that U.S. and [European companies overall are expected to increase earnings](https://www.financedigest.com/european-shares-rebound-with-focus-on-italian-politics-earnings.html "European shares rebound with focus on Italian politics, earnings") this year by about 8%. Russia-Ukraine tension is a low earnings risk for US corporates, but an Energy price shock amidst an aggressive [central bank pivot focused on inflation](https://www.financedigest.com/inflation-fighting-central-bankers-air-climate-role-doubts.html "Inflation fighting central bankers air climate role doubts") could further dampen sentiment/growth,” JPMorgan analysts said in a note. Still, others were betting that the [recent geopolitical uncertainty would mitigate monetary tightening](https://www.financedigest.com/german-yields-steady-spreads-tighten-after-recent-repricing.html "German yields steady, spreads tighten after recent repricing") from central banks, a factor that has weighed heavily on stocks in recent weeks. BlackRock strategists said the Ukraine crisis “has reduced the risk of central banks slamming the brakes to contain inflation.” The strategists said they were “tactically” upgrading equities, noting they believe “market expectations of [rate hikes have become excessive and have created](https://www.financedigest.com/italy-jan-jobless-rate-edges-up-to-7-9-with-35000-jobs-created.html "Italy Jan jobless rate edges up to 7.9%, with 35,000 jobs created") opportunities in equities. Markets are pricing in nearly 150 basis points of Federal Reserve tightening by next February, including a widely [expected rate](https://www.financedigest.com/ecbs-makhlouf-expects-50-bps-rate-hike-in-december.html "ECB’s Makhlouf expects 50 bps rate hike in December") increase in March. However, odds of a hefty 50 [basis-point hike](https://www.financedigest.com/ecb-goes-big-with-50-basis-point-hike-ending-negative-rates-era.html "ECB goes big with 50 basis-point hike, ending negative rates era") next month are down to about 7% from 22% chance estimated 10 days ago, according to the CME Group’s FedWatch tool. Analysts at UBS Global [Wealth Management](https://www.financedigest.com/wealth-management-consultant.html "Wealth management consultant"), meanwhile, advised clients to increase their exposure to raw materials to buffer portfolios against inflation. The conflict between Russia, one of the world’s largest commodity exporters, and Ukraine has already helped push up [oil prices](https://www.financedigest.com/oil-prices-steady-after-u-s-stockpile-swell.html "Oil prices steady after U.S. stockpile swell") to their highest level since 2014, while U.S. inflation last month grew at its [fastest pace](https://www.financedigest.com/sentiment-in-uk-finance-falls-at-fastest-pace-since-2019-survey.html "Sentiment in UK finance falls at fastest pace since 2019, survey") in nearly four decades. King Lip, chief strategist at Baker Avenue [Asset Management](https://www.financedigest.com/asset-managers-on-alert-after-whatsapp-crackdown-on-banks.html "Asset managers on alert after ‘WhatsApp’ crackdown on banks") in San Francisco, was shifting more of client portfolios to commodities, through an Invesco ETF with diverse exposure to commodities, which generally are expected to benefit in inflationary environments. We were [buying it already because of the inflation hedge and now we just think](https://www.financedigest.com/think-big-make-your-new-years-resolutions-to-buy-a-holiday-home-in-2017.html "Think big – make your New Year’s resolutions to buy a holiday home in 2017!") it is going to have more tailwinds on it because you are going to have supply disruptions,” Lip said. But many remained wary. Goldman Sachs recently cut forecasts for the STOXX 600 pan-European equity index and the FTSE, noting the [knock-on effect](https://www.financedigest.com/banking-turmoil-will-not-have-knock-on-effect-on-commodities-trafigura-cfo.html "Banking turmoil will not have knock-on effect on commodities -Trafigura CFO") on production costs and GDP to Europe, which is heavily dependent on Russia for its energy needs. They said, however, that [corporate balance sheets were strong and called the conflict “largely one that raises the risk](https://www.financedigest.com/managing-corporate-currency-risk-the-cfos-balancing-act.html "Managing Corporate Currency Risk: The CFO’s Balancing Act") premium rather than derails the recovery. Generali [Investments equity strategist](https://www.financedigest.com/invest-in-infrastructure-to-escape-the-starvation-cycle-warns-leading-nonprofit-sector-strategist.html "Invest In Infrastructure To Escape The ‘Starvation Cycle’, Warns Leading Nonprofit Sector Strategist") Michele Morganti predicted another 5% downside, based on previous risk premia spikes during the financial crisis of 2008 and the onset of the coronavirus pandemic in 2020. “Looking further ahead though, there’s a sense it will probably get worse before it gets better,” Morganti told clients. Markets remain event-dependent, and we would refrain from aggressively [buying current dips.”](https://www.financedigest.com/cryptoverse-buying-the-dip-bitcoins-a-rates-rookie.html "Cryptoverse: Buying the dip? Bitcoin’s a rates rookie") [(Reporting by Sujata Rao in London and Lewis Krauskopf in New YorkEditing by Ira Iosebashvili and Matthew](https://www.financedigest.com/hurricane-matthew-causes-up-to-15bn-impact-to-us-and-caribbean-economies-in-october-according-to-aon-catastrophe-report.html "Hurricane Matthew causes up to bn impact to US and Caribbean economies in October, according to Aon catastrophe report") Lewis) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---