Biden has agreed to meet with Putin
White House says "President Joe Biden has agreed "in principle" to French-brokered summit talks with Russian President Vladimir Putin as long as Russia does not further invade Ukraine". This is while on Thursday, US Secretary of State Antony Blinken, and Russian Foreign Minister Sergey Lavrov also should meet in Europe.
While this news calmed the markets a bit, however, it does not guarantee that Russia will not attack before that, or, they will not attack after the meeting. What we know is, that this issue will not end without a win-win agreement between Russia and United States. None of them are willing to look like losers. On the military front, Russia appears to be continuing preparations for a full-scale assault on Ukraine at any time.
It seems, for now, still the Russia-Ukraine conflict continues to drive risk aversion. The week started with higher market risk and later with mentioned News from White House eased, while later and with Reuter's report from Kremlin that this meeting is not confirmed yet, again VIX increased above 28.
As a reaction and While today the US cash market will be closed due to Presidential day, three major US stock indexes opened in new multi months low and then moved higher and then again lower. SP500 hit a new low since October 12 last year. It is currently trading at 4350.
The escalation of the conflict hurts economic recovery and affects the financial markets. Oil and gold prices increase together, stock markets tumble, and bond yields will be under pressure. Geopolitical tensions push oil prices up, and it will hold inflation at higher levels. On other hand, if Iran and western countries can agree on their nuclear plan, they also can get back to the Oil market and can be a market-calmer and stop prices from increasing much more.
Therefore, we can say, yes, market tensions still can continue and we have to learn how to trade with that, instead of ignoring the situation. The risk is high and no one knows what is going on in Mr. Putin's mind. However, it cannot go long, because war and holding the troops' standby for a long time have high financial and non-financial costs. If you are willing to invest for a long time, then it is time to buy.
