In times of war, markets price worst-case scenarios with increased probability. This leads to sharp retracements that tend to correct eventually.

An interesting piece by LPL Research shows that the market finds a bottom fairly quickly – one/two weeks after the invasion event, looking at data from the last 20 years.

The invasion of Ukraine is quite possibly one of the most relevant military events of the last 50 years for developed markets.

Its implications for the geopolitical balance between the West and a resurgent Russia might be more far fetched than appears at first glance.

Nevertheless, it’s still possible that markets shrug it off and get back to business.

source: Toggle

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