TRPL - Weekly Market Pulse: Ukraine Isn't The Problem

• Russia supplies natural gas to Europe, and in the event of US sanctions, this could impact Europe. But there are so many LNG ships in the Atlantic right now that lease rates have collapsed, so Russian threats to cut off Europe’s gas may not be much of a threat.
• The other big threat from a Russia/Ukraine war is, supposedly, a spike in crude oil prices. US sanctions would presumably include some ban on importing Russian oil, but only about 11% of our energy imports come from Russia.
• Less than 1% of S&P 500 revenue comes from Ukraine/Russia, so any direct impact on large US companies is tiny. Higher oil prices could certainly impact the US and global economy, but experience tells us that embargoes/sanctions are ineffective.
• There are plenty of reasons for US stocks to be selling off right now. Rising interest rates and the potential for a Fed policy error have been offered as reasons for the selling, but interest rates at current levels should not have much impact on valuations. Could the Fed hike rates so far they put us in a recession?

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