Ukraine Invasion and Financial Markets
Global markets appear to be responding in line to the risks associated with the Ukraine-Russia conflict. This assumes no recession, no widespread cyber warfare, no direct military conflict among great powers, and no major financial markets contagion. While unlikely, if any of these do occur, global stock markets and credit-sensitive fixed-income could decline noticeably from current levels.
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Regardless of the path of the conflict, financial markets and commodity volatility should be expected to continue for at least several more weeks. Large stock price declines and gains on a daily and weekly basis should be expected. Countries not involved in the conflict or with sanctions are likely to do better.
Oil producers (Russia excepted) should do better than oil consumers. Cybersecurity, energy and defense stocks have done well recently. However, when the conflict eventually winds down, these sectors are likely to underperform and others are likely to rebound.
Please contact your WESCAP advisor to discuss this further.