U.S. stocks ended today's session sharply lower on the heels of rising geopolitical tensions between Russia and Ukraine. Melissa Brown, Managing Director of Applied Research at Qontigo, joins Cheddar News' Closing Bell to discuss.

Closing Bell

Stocks Close Sharply Lower Amid Russia-Ukraine Tensions

all right, turning back to the major averages. Kristin, thank you so much. We have Melissa Brown here, managing director of Applied research at Quantico Now, Melissa. My first question for you is with stocks ending the day sharply lower on the heels of those geopolitical tensions between Russia and Ukraine. What do you make of today's activity? Well, we've been seeing sentiment be quite negative and actually getting increasingly negative and the negativity spreading out from mainly being in the U. S. And europe to the rest of the world as well. So what that means is that you're going to tend to see bigger reactions to bad news when sentiment is really negative. And that seems like what we've seen today. Now, investors are closely watching the tensions between Russia and Ukraine. So how do you think it will continue to impact investor sentiment going forward? Well, it, I think there are certainly concerns and every reason to be concerned. Um, I've seen studies done though that over the long term, those kinds of tensions really don't have any long term impact on markets. So if you're looking for a positive and it maybe that's, uh, that's one positive that we can look at. But um, I think, you know, the markets don't like uncertainty and there's a lot of uncertainty going on here. Well, that's leading to my next question. How do you think the market will react if Russia does invade Ukraine in the coming days or weeks, You know, in the short term, it probably won't be a good reaction. If you look at what happened today, um, just on, on, you know, on the possibility that certainly suggests that it might, you know, the market could react badly. On the other hand, there's the old saying, buy on the rumor, sell on the news or in this case cell on the rumor bi on the news. And so, um, I think we'll just have to watch it closely now. Which sectors do you believe will be hit the hardest if an invasion were eventually to take place? Well, you know, that is, um, that's also hard to say. I think, um, if I, you know, if it leads to broader problems around the world, if we continue, if it means that interest rates continue to go up, for example, that is going to hit, you know, technology or continue to hit technology, it already has, um, uh, we can, you know, if we see disruptions in the, in the oil supply, we could see a hit to energy stocks. Um, and so, but I mean, it's hard to say exactly until we see how things unfold. What are your thoughts on the january Fed minutes from yesterday and how they will impact markets? Well, you know, it's interesting because what we have been seeing is that, um, investors are certainly expecting a rate hike and, uh, the, the futures are currently suggesting, um, that it's basically a 50 50 split between expectations of a 25 basis point rise and a 50 basis point rise. And so, um, I think I what where the potential issues could be is if actually the Fed doesn't raise rates which is a possibility if they start to be concerned about, you know, what's happening in the geopolitical universe. So so how long time to talk about inflation? Because we can't talk about anything without mentioning inflation. So how long do you think inflation is here to stay and how would impact markets? So do you think that perhaps next month's rate hike will be enough to begin combating inflation at all? Well, I think the market is telling us that um it thinks a rate hike or maybe the potential of a few rate hikes will be enough because if we look at inflation expectations as measured by break even inflation. They haven't budged really. They they for the past several months. And so um you know, investors seem to think that the Fed's action will be effective but it does look like reported inflation is going to stay high for a while because even um when we if you look at the month to month numbers, they've been up every month. And so just to get the annual number, which is the headline number down, we're going to have to see several months of of no increases. Alright Melissa Brown, managing Director of Applied research at Quantico melissa, Thank you so much for being with us and sharing your expertise