Investors face renewed inflation fears, even as the Federal Reserve prepares to more aggressively raise interest rates, thanks to supply disruptions from the conflict, which have sent oil and gas prices spiking. On January 26, 2021, BlackRock released its annual Letter to CEOs, which is also commonly referred to as the Fink Letter. Markets have been dragged lower so far this year amid ongoing uncertainty over the conflict, with the S&P 500 falling roughly 7% in 2022, while the Dow is down nearly 6% and the tech-heavy Nasdaq Composite 12%. 10 Yet, 10 of BlackRock’s assets alone are responsible for 85 of its portfolio emissions. The war between Russia and Ukraine has had a big impact on the global economy, especially as supply-chain shocks have sent food, energy and other commodities prices skyrocketing. BlackRock’s Net Zero statement anticipates that 75 of its assets will be invested in corporate and sovereign issuers with science-based targets or equivalent by 2030. These negative aspects of globalization have now “caused the pendulum to swing back to local sourcing,” Marks noted. As Russia is cut off from the global economy, Marks warns that further sanctions are “complicated enormously” by Europe’s heavy dependence on Russian energy and the United States’ need to outsource computer chip manufacturing. BlackRock, the world’s largest asset manager, is coming under scrutiny from a group of state attorneys general over its aggressive push on so-called ESG. “The magnitude of Russia’s actions will play out for decades to come and mark a turning point in the world order of geopolitics, macro-economic trends and capital markets.” Tangent:Īnother influential Wall Street investor, Howard Marks of Oaktree Capital, echoed many similar concerns in his own letter to shareholders on Wednesday.
“The world is undergoing a transformation: Russia’s brutal attack on Ukraine has upended the world order that had been in place since the end of the Cold War, more than 30 years ago,” Fink wrote in his letter to shareholders. While he has previously been skeptical about cryptocurrencies, Fink wrote that the havoc caused by Russia’s invasion could boost virtual currencies: “A global digital payment system, thoughtfully designed, can enhance the settlement of international transactions while reducing the risk of money laundering and corruption.” Crucial Quote:
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