Thoughts on the Market: February Edition
Markets Fret the Three “In’s”: Inflation, Interest Rates and International War
Written by Jamie Murray, CFA
The escalating war in Ukraine has roiled capital markets with swift sanctions, exacerbating supply challenges. Keep in mind, the Russian economy is insignificant on the world stage, accounting for ~1% of global GDP. A company such as Mastercard has likely lost its revenue from the region (forever) but the 2% hit to its revenue will soon be forgotten as the rest of the world continues to move to digital currency. The upshot is the inflationary effects of higher energy and commodity prices. Commodities, including wheat, oil, European gas and nickel, reached decade-high levels in early March as the West quickly shut off trade with the country.