Key Takeaways

  • The S&P 500 closed 4,418.64 at 4,500.52 last Friday. The VIX spiked to $30 on Friday before receding to $27.36.
  • The market appeared to be regaining some footing earlier in the week, and topped out at 4,587.18 on 2/9. Bullard’s Thursday comments along with the White House announcement of a potential imminent Russian of Ukraine led to selling.  
  • The much-anticipated CPI number also came in hotter than consensus, adding to the inflation anxieties. - Expectations for Fed tightenings jumped considerably in the wake of Bullard’s comments and all eyes are on an unscheduled Fed meeting on Valentines Day.

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Markets were down heavily on Friday but recovered some from their deepest point of losses going into the close. This selling was mostly prompted by the White House announcing the potential imminent invasion of Ukraine with what seemed like a deep sense of urgency. We’re not sure what’s going on in Vladimir Putin’s head by any means and we’re not discounting the possibility of an invasion, we will only remind our subscribers that most of the time geopolitical risks have a limited effect on the course of markets. Effects can be abrupt but are usually short-lived.

Just because markets tend t...

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