Market Commentary

Russia’s invasion of Ukraine is creating turmoil in global markets today, with a broad-based selloff in global equity markets on fears of trade disruptions and higher energy costs.

Russia is the world’s third largest producer of petroleum and a major source of oil and natural gas for Europe¹. As such, various current and potential sanctions by the U.S. and other countries placed on Russia’s energy exports will put upward pressure on oil, natural gas, and motor fuel prices; and has the potential to negatively impact consumer discretionary spending power and further exacerbate current high inflation levels here in the U.S.

The combination of geopolitical uncertainty and the prospects of slower consumer spending and prolonged inflation can have a near-term negative impact on investor sentiment and stock market performance; however, the impact of geopolitical events are generally short-lived and we expect that once the new status quo emerges in Ukraine, the focus in equity markets will quickly revert back to corporate earnings and growth rates, which remain relatively robust.

We will be monitoring closely the developments in the Ukraine and its impact on our economic and financial market outlooks.

In the meantime, we advise clients to assess and plan for near-term liquidity needs, but remain focused on their long-term investment goals and objectives and avoid the temptation to make any major asset allocation changes based on near-term events.

Although less visible than tanks and troops, it also has been widely reported that Russia’s cyber forces are launching next level cyberattacks on Ukrainian and western finance and communications infrastructure. Washington Trust has a significant and sophisticated information and data security program to detect and defend against threats. Clients also should remain vigilant and take measures to protect their computers and networks. Please contact us if you experience any cybersecurity issue so that we may watch for suspicious activity and provide extra precautions, if needed.

¹ U.S. Energy Information Administration website – 2/24/22