February 2022

A Dark and Inexplicable Day - Market and Portfolio Ramifications of the Ukraine/Russia Crisis

Russia’s invasion of Ukraine is among the most important geopolitical events since the end of the Second World War. The consequences for markets—while likely to be far-reaching—pale in comparison to the human impact of war. While in our recent update we focus on the financial impacts of these events, our thoughts are with the people whose lives have been touched by the conflict.

Financial markets initially responded to the news as they often do to geopolitical events of this type. Global equity indices immediately fell by 2-4%, oil surged to over $100 per barrel and gold rallied. But markets quickly stabilized, and as we write this on Friday, February 25th, the S&P 500 index, crude oil and gold prices have all returned roughly to the levels at which they ended last week. Ukraine’s GDP of roughly $155 billion represents 0.14 percent of the world economy. Russia’s economy is nearly ten times larger but still small relative to the global economy. However, Russia’s role as a major exporter of energy to Europe and the potential for a drawn-out conflict that could escalate into neighboring NATO countries create significant risks to the international order and to financial markets.

In response to the Russian invasion, the U.S. and its European allies have imposed sanctions, with more potentially to come. Germany has halted approval of Nord Stream 2 gas pipeline from Russia. The situation remains fluid and impossible to predict.

Download and read why we advise our clients not to panic.


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