The Markets

If you think Russia could have found a colder place to hold the winter Olympics than Sochi, where the average January 2014 temperature was 51° Fahrenheit, you’re right. In some Siberian towns, negative double-digit temperatures are considered the norm during winter months. If you thought Russia sending troops into Ukraine’s Crimean Peninsula would unsettle world markets, you would have been wrong. 

While the world was watching the winter Olympics, the Ukrainian people were staging a revolution. They ousted President Viktor Yanukovych and, according to The Economist, Ukraine’s new leaders began forming a pro-European government. Russia’s president Vladimir Putin asked the Russian parliament for permission to deploy troops in Ukraine. America warned there would be consequences for such an action. 

Regardless, Mr. Putin persisted, perhaps believing the West will be more “worried about keeping Russian oil and gas exports flowing than about standing up for the idea of a Europe whole and free.” It’s probably fair to say neither the winter Olympics nor reality TV about housewives in any county or city has ratcheted up the drama in the way Mr. Putin did last week. 

So, how did markets respond? Six world indices lost value last week (in Australia, Japan, China, Indonesia, United Kingdom and Mexico), 17 showed gains, and one remained unchanged. 

Why were markets so bullish? According to Barron’s, markets in the United States focused on strong consumer confidence data, evidence of sales growth for durable goods, and new Federal Reserve Chair Janet Yellen remarking the last six weeks of economic data have been surprisingly weak (which some hoped could signal a pause in tapering).

 
 
 

Lexington Wealth Management