We wake this morning in a new world. All-out war is occurring in Europe for the first time in 70 years. Let’s all pray for the Ukrainian people and the neighboring states in eastern Europe.
From our perspective, the impact of significant geo-political events on our financial markets tend to be sharp but brief. (See chart below) The Russian economy is small - smaller than California’s economy – and is not a vital trading partner with the US. Sanctions will be placed on Russia that will have some impact on global markets, most likely in the form of higher prices on oil & gas. The US and our NATO allies appear unified in standing against the action by Russia.
Our economy remains solid. The Omicron variant is fading, the job market is very strong, family balance sheets are sound. Unemployment just hit the lowest level in 52 years. Gross Domestic Product (GDP) for 2021 was the highest since 1984.
The financial markets, as they have always done, will adjust to whatever the future holds. We continue to monitor the situation closely and will adjust accordingly.
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