*Biden added that the United States had no intention of fighting Russia. He said the sanctions, among others things, target Russian banks and sovereign debt.*
*President Joe Biden on Tuesday announced sanctions on Russian bank VEB and its military bank, Russia’s sovereign debt and certain wealthy individuals and their families. The U.K. has also started targeted economic sanctions against five Russian banks and three wealthy individuals… as he blamed Moscow for what he called the beginning of an invasion of Ukraine. That comes after Biden on Monday issued an executive order barring new investment, trade and financing by U.S. persons in the breakaway regions where Russia sent troops.*
*Britain published a list of sanctions and Germany froze the Nord Stream 2 Baltic Sea gas pipeline project, which would have significantly increased the flow of Russian gas.*
*That move came a day after Russian President Vladimir Putin said he would recognize the independence of two breakaway regions in Ukraine, potentially undercutting peace talks with Biden. Putin also ordered forces into the two breakaway regions.*
*On Sunday, the White House said that Biden has accepted “in principle” to meet with Putin in yet another effort to deescalate the Russia-Ukraine situation via diplomacy. White House press secretary Jen Psaki said the summit between the two leaders would occur after a meeting between Secretary of State Antony Blinken and his Russian counterpart Sergey Lavrov.*
*Earlier on Tuesday, NATO Secretary-General Jens Stoltenberg said that the alliance believed Russia was still planning a big assault on Ukraine following Moscow's recognition of two separatist regions in the former Soviet republic's east.*
*The measures announced by Biden were not as harsh as some investors had feared. But he said the effect is likely temporary given that the Ukraine-Russia crisis is not over.*
“Military confrontations are scary,” but the market seems to believe the confrontation over Ukraine will be “limited,” said Jeffrey Kleintop, chief global investment strategist at Charles Schwab, in a phone interview Tuesday. “The market reaction is mild relative to a lot of the fears” over potential spillover effects, such as “fears of World War III” or a recession, he said.
Gold was little changed, the dollar was flat and benchmark Treasury yields drifted at 1.92%. In European trading, the Stoxx 600 Index fell as much as 2% before recovering losses.
Russia is a “very small” trading partner with the U.S., said Kleintop.
Meanwhile, officials from the European Union referred to Putin’s latest moves, including the recognition of the independence of the Russian separatist Donetsk and Luhansk regions’ independence, as “a blatant violation of international law.” And Germany took steps to halt certification of the Nord Stream 2 pipeline that’s set to carry natural gas from Russia to Western Europe.
*Biden said the U.S. was working closely with Germany on halting the Nord Stream 2 pipeline, which sent European natural gas futures 11% higher earlier in the session. He also said the administration was monitoring the energy sector as the threat of disrupted supplies has kept oil prices elevated. West Texas Intermediate crude traded close to $92 a barrel.*
“The stock market is right to be concerned about current tensions between Russia and Ukraine, which run the risk of exacerbating the challenging inflation backdrop that many investors and companies have expected to improve in the back half of 2022,” wrote RBC Capital Markets’ Lori Calvasina. “The bad news is that the investment community still appears to be in the early days of understanding the potential implications of this conflict.”
“European leaders might feel compelled to cut off imports of natural gas and oil from Russia, despite the very serious economic pain which this would entail,” said David Kelly, chief global strategist at J.P. Morgan Asset Management, in a note Tuesday. “Putin could, of course, turn off the energy tap himself in reaction to Western sanctions.”
By: via @AlliesFin Serve Stock Market
