If the markets followed the news, they would crash and stay down. Why in the middle of the COVID uncertainty did they start rising again in March 2020? Nobody knows. And nobody knows the "why" of the markets, just the "what" - and the news is just made up afterwards to fit the market's movements.
If in one week or one month Ukraine is still invaded and the markets are up, what does that mean?
> If in one week or one month Ukraine is still invaded and the markets are up, what does that mean?
It means that things have stabilized. Markets hate uncertainty. If the Russians stay in Ukraine, that's bad news for sure, but it means things have stopped changing.
Stock markets hate geopolitical instability of any kind.
Productivity of the entire world was almost destroyed with COVID lockdowns (and still has not recovered), but stock markets have been hitting record highs since.
You have actual risks for food, fuel and the based on them products. Also, during the covid crisis, the central bank were trowing money like an russian oligarch in a nightclub while FED and likely ECB will raise the base interests to contain the inflation.
This is just more can kicking. It will be bad when they finally pull back, but they are also waiting for the best context to pull back. Inflation will continue to shoot up, the pressure for the Fed to finally act will build.
If the US does what they should, they should completely blockade Russia from any access to the West, including SWIFT blockade, trade embargo, complete visa revocation, etc. This is not that useful (sp not compared to doing it 10 years ago) but still helps to reduce Putin's ability to keep waging war as it cripples Russia's economy.
BUT that of course has a cost to the West. Less business, risk of recession, risk of stagflation, etc. and that definitely tanks the economy. Until yday Bloomberg estimated the SP500 was trading at a 10% discount due to war concerns (my take is only ~5%) and overnight it has fallen only 2%, so I don't think a 2% fall over the largest war Europe has seen since WW2 is particularly large.
Severe sanctions will only end up hurting the average russian citizen. In a dictatorship, that's a good way to create further instability. You don't want to make a Afghanistan out of Russia. Especially not with the number of nukes they have.
If in one week or one month Ukraine is still invaded and the markets are up, what does that mean?