Opportunity In 52-Week Lows

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In his Daily Market Notes report to investors, while commenting on the 52-week lows, Louis Navellier wrote:

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Once the world made it clear there would be no military defense brought to the aid of Ukraine, only to NATO countries, Putin moved in quickly.

The sanctions have hit Russia; the Russian Index is below its pandemic low, the Russian 10-year bond yield has spiked to 13%. 

But Russia has a ready market for its energy as well as a backstop banker: China. Xi Jinping and Putin more or less said they had each other's backs during their speeches at the opening ceremonies of the Beijing Winter Olympics.

Fed Easing Likely

The immediate impact is higher energy prices; US crude rose to over $100 a barrel this morning, the highest since 2014.  This will translate into more inflation and make it more difficult for the Fed to backpedal on its intention to tighten policy to fight inflation.

Nevertheless, no one will be surprised if the Fed eases their approach if the situation hasn't improved by the time of their next Open Market Committee meeting on March 15-16.  It would seem likely that before then the ECB will make easing maneuvers, paving the way for the Fed. 

Opportunity In 52-Week Lows

This level of uncertainty and the volatility it has brought is creating opportunities in multiple sectors and asset classes. Does it make sense that Caterpillar Inc. (NYSE:CAT), 3M Co (NYSE:MMM), Stanley Black & Decker, Inc. (NYSE:SWK), and Intel Corporation (NASDAQ:INTC) are hitting 52-week lows?  

Could the NASDAQ be down 20% from the November high?  When there's blood on the streets it's almost always time to start buying. Remember the Buffett dictum:  Be greedy when others are fearful, and fearful when others are greedy.  

No Clear Bottom

Retail sentiment is extremely bearish: only 23% bullish (vs 38% ave), 54% bearish (vs 40% ave). Note that CBOE Volatility Index (VIX) is most bearish in the current market and trails lower in months ahead.  There is no clear bottom yet to the overall market but quality companies are on sale and your shopping list should be ready for the inevitable bounce with the military action ends.