Ukraine Drags Down Stocks Again Ahead of Key Vote

U.S. stocks declined today, with the Nasdaq Composite posting its first weekly drop in six, as concern escalated about Ukraine, two days before a vote in Crimea on joining Russia.

U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov met in London Friday, and were unable to alleviate the situation. Russia had warned Ukraine’s government had lost control of the nation, and the U.S. and the European Union said Russia would face sanctions if it does not back off from taking control of Crimea, where a referendum is scheduled for Sunday on whether to join Russia.

Kerry told a televised news conference that Russian President Vladimir Putin was not ready to “make any decision regarding Ukraine until after the referendum on Sunday.”

Ukraine and the West have described the vote as illegal. They have accused Russia of violating Ukraine’s sovereignty and are threatening sanctions.

Russia’s benchmark index had its biggest weekly drop in two years, down more than 7%. For the year the index is down more than 17%.

The ruble weakened further against the dollar. Russian markets have been hit hard by fears that the crisis will deter foreign investment and wipe out growth this year.

The Nikkei in Japan dropped more than 6% this week. Recent poor export figures from China have sparked worries about the pace of growth in the world’s second biggest economy and has sent some investors to seek safety in Japan’s yen.

Separate economic data showed producer prices unexpectedly fell last month, with the 0.1 percent decline in the producer-price index coming after a 0.2 percent climb in January, the Labour Department said.

News Sources:  CNBC and CNN Money

My Market View:

What can you say, the market doesn’t like uncertainty, there is much headline risk over the weekend thanks to this vote.  The best case scenario for the market is for the vote to go the way of staying part of the Ukraine, otherwise it will cause further volatility next week.