Life During Wartime: Assessing the Market Impact of the Russia/Ukraine Conflict

February 25, 2022 | Evan Frazier, CFA, CAIA, Senior Research Analyst

Recent days have seen an escalation of political tensions in Eastern Europe, and on February 24th, Russian forces began conducting large-scale military operations in Ukraine. These actions have drawn widespread condemnation from the international community, with NATO repositioning troops along its eastern flank and both the United States and European Union announcing intentions to impose sanctions on a variety of Russian financial institutions. The conflict has also threatened the stability of global markets, particularly those areas of the world economy that are most sensitive to energy and the performance of emerging market countries. The aim of this newsletter is to assess the ramifications of Russian actions vis-à-vis the broad market and determine the potential implications of further escalation of the conflict going forward, including:

• Equity index performance
• Index exposure to Russia and Ukraine
• Commodity market expectations
• Central bank policy and inflation impacts
• Historical impact of similar exogenous shocks on equities

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