Financial markets, no reaction after Trump-Putin meeting and ahead of peace talks

Financial markets did not register significant reactions after the meeting at the end of last week between US President Donald Trump and Russian President Vladimir Putin, nor in anticipation of the meeting scheduled in Washington between Trump, Ukrainian President Volodymyr Zelensky and European leaders. This, given that, at least until yesterday afternoon, there was no sign of an agreement on a ceasefire in Ukraine, at least in the near future.

The pan-European Stoxx 600 index was down 0.12% yesterday at 13:00 Romanian time, the German DAX index was down 0.31%, while in London the FTSE index was down 0.08%. In the United States, the S&P 500 index ended Friday's session down 0.29% and the Nasdaq Composite was down 0.4%, with both baskets of stocks nearing all-time highs. Three and a half hours before the US trading session opened, futures for US stock indices were down.

European leaders, including German Chancellor Friedrich Merz, French President Emmanuel Macron and British Prime Minister Keir Starmer, traveled with Volodymyr Zelensky to Washington to meet with Donald Trump at the White House to discuss a possible peace deal. Trump met with Putin in Alaska last Friday, but the meeting ended without a ceasefire. Later, several sources reported that Putin told Trump that he would only accept a ceasefire if Russia were given control of the Donbas region in eastern Ukraine. On Sunday, Trump's personal envoy, Steve Witkoff, hinted that Ukraine could be offered security guarantees as part of a possible deal to end the war, according to CNBC.

The Moscow Stock Exchange's Moex index was down 1.89% at 1:30 p.m. yesterday, while the Ukrainian stock market is inactive, with only government securities trading to finance the defense budget.

• BMO Private Wealth: "Geopolitical issues fail to capture investors' attention for long, if ever"

Carol Schleif, chief market strategist at BMO Private Wealth, the high-net-worth arm of Bank of Montreal, said markets are more focused on economic data and monetary policy outlooks now that the Ukraine conflict is years old.

"The only thing that's new is that there hasn't been anything new. I don't think there will be anything that's really relevant to the markets - geopolitical issues don't usually capture investors' attention for very long, if ever. The markets are at all-time highs, despite the fact that this conflict has been going on for three years. Investors are much more focused on consumption, inflation and the messages coming out of Wyoming,” Schleif told Reuters about the Trump-Putin meeting last weekend.

The annual meeting in Jackson Hole, Wyoming, will be held from August 23 to 25, bringing together financial leaders and top economists to discuss major global economic issues. The event is being closely watched because speeches, especially from the Federal Reserve chairman, provide clues about monetary policy that can influence financial markets.

According to Eric Teal, chief investment officer at financial services firm Comerica, the fact that no economic sanctions were announced following the Trump-Putin meeting is a positive thing and markets should breathe a sigh of relief.

"In any case, we see opportunities in the energy sector, given that oil prices are now quite low and the prospect of sanctions on oil has not materialized. It is possible that a relief rally will occur, which could be a good time to invest in energy as we enter a season of higher demand and accelerating economic growth,” the Comerica director said, quoted by Reuters.

Following his talks with Putin, Trump said he would postpone imposing tariffs on countries that buy Russian oil. He had previously threatened sanctions on Moscow and countries such as China and India, which buy Russian oil, if steps are not taken to end the war in Ukraine.

Yesterday, at 1:30 p.m., Brent crude was trading down 0.24% at $65.59 a barrel, while West Texas Intermediate, the U.S. benchmark, was down 0.22% at $62.17 a barrel, according to Investing.com data.

According to Comerica's chief investment officer, gold and precious metals are likely to see a sell-off, as they are considered safe-haven assets. "However, given the concerns about inflation, they can also provide good buying opportunities if corrections occur,” Teal added.

Gold was up 0.41% at 1:30 p.m. yesterday to $3,349 per ounce, while silver was up 0.26% to $38,115 per ounce.

• Running Point: "I think the markets will view the situation as status quo, but I think there's only upside potential from here on out”

Michael Ashley Schulman, chief investment officer at investment firm Running Point, believes that, given that more than three years have passed since the start of the war, last weekend's meeting should not have much of an impact. "I think the markets will view the situation as status quo, but I think there's only upside potential from here on out,” Schulman said, quoted by Reuters. Louis Navellier, founder and chief investment officer of Navellier & Associates, a portfolio management and investment advisory firm, believes that when a ceasefire is reached, the stock market may rally due to the so-called peace dividend, according to Investors Business Daily.

• Price Futures Group: "The threat of immediate sanctions against Russia or other countries is on hold for now”

Phil Flynn, senior analyst at financial services firm Price Futures Group, says oil traders are waiting for a deal in the Ukraine war, and until that happens, crude prices are likely to remain locked in a narrow range. "What we do know is that the threat of immediate sanctions against Russia or secondary sanctions against other countries is on hold for now - which puts downward pressure on prices,” the analyst said, quoted by Reuters.

Following Western sanctions on Russian oil, Moscow has redirected its exports to China and India, the publication also notes.