On Ukraine, Oil, Wheat, the S&P 500, and more

Last week, Russia’s efforts to take over Ukraine increased global uncertainty and impacted many global markets.

The following charts highlight the effect on oil, wheat, the Russian Ruble, and the S&P 500. Each chart notes the increased Russian military presence at Ukraine's border during November 2021.
Russian Ruble vs. U.S. Dollar
The value of the Russian Ruble, relative to the U.S. dollar, has declined about 40% since the beginning of 2022.

OIL
Oil prices have increased over 50% year-to-date, driven by production/availability concerns and global uncertainty.

S&P 500
Factors driving the 9% year-to-date decline in the S&P 500 include the Russian/Ukrainian conflict, valuation concerns, inflation dynamics, and monetary policy. Globally, many other equity markets have also declined.

Wheat
Disruptions in Russian and Ukrainian wheat production have driven its price up over 50% year-to-date. Corn, soybeans, and other crops have also had significant price increases.

OUR TAKE

• The "fog of war" is making decision-making more challenging and uncertain for policymakers, business leaders, and others, and the Russian/Ukrainian conflict will likely have a long-term geopolitical impact.

• Regarding oil prices: The sharp move up is impacting businesses and consumers. It also supports the view that oil alternatives are needed in many sectors.

• Regarding wheat prices (and other agricultural commodities): Their heightened prices will likely increase food insecurity around the world.

• Regarding market volatility: Our Feb. 20, 2022 note discussed this topic (comments here.) Since then, market volatility has increased - with the S&P 500 VIX index over 30.