From the frontline to the bottom line:
The crisis in Ukraine and volatility in the stock market
This week, under the looming threat of an invasion of Ukraine global stock markets became very jittery. While the threat of conflict is not the only driver of market volatility (economic policy announcements from the US Federal Reserve were a major factor as well) it is important for retail investors, and especially those in the military, to understand some of the macro forces, like uncertainty over armed conflict, that can impact investments.
In the last six months, Russia has amassed over 100,000 troops near eastern Ukraine and threatened a full-scale invasion of the country. Last Thursday, in response to the continued buildup of Russian forces, the Biden administration ordered an additional 8500 troops on standby for deployment to the EUCOM theater of operations in response to the escalating tensions. Fears of an imminent invasion have sparked both additional deployments and rhetorical saber-rattling between the United States and Russia. While the world watches and waits for Russian President Vladimir Putin’s next chess move, it’s clear the immediate impact is that 8500 American military families are on notice that their loved ones may be moving in harm’s way. What is less clear is what impact these geopolitical machinations will have on global markets.