A Quick Note on Russia/Ukraine

The news tonight that Russia has begun to invade Ukraine comes as no surprise as it has been telegraphed for weeks. The stock market has also moved lower over the last two weeks on concerns that Putin would order the invasion. Stocks are likely to open lower tomorrow morning, continuing the selloff from Thursday and Friday. However, what comes next is far less certain than one might think. That is because looking back at some past conflicts/invasions/wars stocks have moved lower on rumors of a conflict, but when the actual invasion or war began, stock prices went higher.

One of our favorite investment research firms, Fundstat, has the details:

Take a look below. We highlighted the 5 most recent armed conflicts that impacted markets broadly. 5 out of 5 times stocks bottomed at the invasion or just before the invasion. This is counter to what many think. In fact, many might logically believe that uncertainty from conflict means “risk off” until the conflict ends. This is not the case.

From our vantage point it certainly seems as though Putin is going to do whatever he wants in Ukraine. And while this is terrible for the Ukrainian people, the impact on the U.S. economy may be very minimal.

I will be sending an update tomorrow(Tuesday) with our latest thoughts on not just the situation in Ukraine, but we will also look at the latest on the Fed and inflation and what it means for client portfolios.