How the S&P 500 Can Stabilize Amidst Conflict in Ukraine

The market is waiting for big news this week in addition to the biggest variable of all — the conflict in Ukraine. The chairman of the Federal Reserve testified to both houses of Congress about monetary policy and inflation on Wednesday and Thursday.

The Ukrainian flag positioned next to the Russian flag.

Source: Shutterstock

And then we got new labor and unemployment data today. Overall, we remain cautiously optimistic, but we also don’t think the volatility we saw last week has ended.

Monday: Which Stocks to Buy as the Market Bounces

Despite significant uncertainty about Ukraine, inflation, and the energy market, traders drove the market higher at the end of last week. In Monday’s livestream, we discussed whether the rally will last or will be a dead cat bounce. We also looked at the best stocks to buy if stocks keep rising and some uncertainty leaves the market.

Some upcoming events we have on the radar include the Fed meeting (more on that below) and Friday’s labor and wages report. The unemployment rate has been dropping, and wages have been rising, but is it enough to stave off inflation woes?

Wednesday’s Strategic Trader Weekly Update: Here’s How the S&P 500 Can Stabilize

Normally, you wouldn’t expect the stock market to rally on the news of an unprovoked invasion of a sovereign European nation, but that’s exactly what happened last week. So… what’s going on?

Traders’ hearts and minds are focused on Ukraine, but that didn’t stop the S&P 500 from soaring after the invasion late last week. The belief is that ongoing conflict in Ukraine is going to be a drag on global economic growth, which should reduce general inflationary pressures around the world. This, in turn, should take some of the pressure off the Fed to take aggressive steps to combat inflation in the United States.

Fed Chairman Jerome Powell met with Congress on Wednesday and Thursday to say that he would back a quarter-point rate increase, with the caveat given to the House Financial Services Committee: “There are events yet to come and we don’t know what the real effect on the U.S. economy will be.”

Last Night’s Livestream: Stock to Buy as Oil Rises

The price of crude oil has been soaring since Russia invaded Ukraine. This has triggered huge moves in energy stocks and has many worried about consumer discretionary stocks as rising oil prices drive inflation.

The volatility has generated some bullish opportunities to buy stocks but has also uncovered some bearish warnings to potentially sell other stocks.
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Something new we want to make sure we’re covering each week here is a “highlight reel” of sorts for our recent profits. Here’s what we saw since our last update:

  • 2.17% (58.68% annualized) on Constellation Brands Inc. (NYSE:STZ) Feb. 25, 2022 $245 Covered Calls in 17 days
  • 0.66% (12.68% annualized) on The Walt Disney Co. (NYSE:DIS) March 11, 2022 $165 Covered Calls in just under three weeks
  • And 0.51% (10.24% annualized) on Southwest Airlines Co. (NYSE:LUV) March 18, 2022 $52.50 Covered Calls in 19 days.

That rounds out our total closed positions in 2022 so far to 25… and still zero losers.
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Don’t forget to catch our twice-weekly livestreams on Mondays and Thursdays at 7:00 pm Eastern on YouTube.

We’ll be back with you next week.


Article printed from InvestorPlace Media, https://investorplace.com/tradingopportunities/2022/03/how-the-sp-500-can-stabilize-amidst-conflict-in-ukraine/.

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