02/22/2022
With the recent geopolitical tensions escalating between Russia and Ukraine, I wanted to provide you with a timely update on the potential financial impacts that this may have on North American and European markets.
What Happened?
On the 21st of February 2022, Putin proclaimed that the Luhansk and Donetsk People’s Republics, which Ukraine and most of the world views as its sovereign territory, should be recognized as independent states. Russian troops have been ordered into the breakaway regions to perform “peacekeeping duties”; the US said calling them peacekeepers was "nonsense” and accused Russia of creating a pretext for war.
What does this Mean for Markets?
The conflict between Russia and Ukraine may contribute to increased short-term market volatility.
It is however very important to remember that historically geopolitical crises typically do not have long-term consequences for investors.
There have been multiple altercations that have occurred over the years (see Remember These Events attachment) and markets have consistently been resilient.
Disruption of Russian energy exports as a result of the conflict could temporarily contribute to rises in global energy prices.
Future reactions and sanctions from the U.S. and Europe may cause a restriction of natural gas to Europe from Russia.
Overall the U.S. and Canada will most likely remain insulated from the conflict.
