• On Friday, the S&P 500 fell just below 1.0% and traded below the 4350 level.

• As violence in Eastern Ukraine intensifies, the Ukraine crisis continues to be the main driving force on the market.

The US equity markets fell for a second consecutive session Friday before the long weekend. Now, they are on track to post a second consecutive negative weekly close for only the second time since November 2021. US equity investors stated that they don't want to be "exposed" ahead the long weekend. US markets will be closed Monday for President's Day. They also said that they were taking profits in the event of a further escalation in the Ukraine crisis. On Friday, the S&P 500 fell just below 1.0% and traded below 4350. This would mean that it will post a 1.8% weekly decline, increasing its losses from earlier monthly highs of 4600 to greater than 5.0%.

S&P 500 bears are hoping that next week's stop will be at the 4220s annual lows. This will be more than 2.5% lower than current levels. Equity investors will be cautious as hostilities escalate between pro-Russian separatists in Eastern Ukraine and Russia's military near the Ukrainian border. There are also concerns about a wider Russo-Ukrainian conflict. Next week's key event is the face-to-face meeting of US Secretary Anthony Blinken with Russian Foreign Minister Sergey Lavrov. This could help to de-escalate tensions. According to reports, the US accepted the meeting under the condition that Russia does not invade Ukraine.

Geopolitics remains at the forefront investor attention due to fears that an outbreak might lead to massive Western sanctions against Russia with inflationary implications. Fed talk and US data have been ignored this Week. There has not been any data from tier one that could impact Fed tightening expectations. Neither have Fed members made any new or interesting comments. This will likely continue into next week with the exception of the flash February PMIs and January Core PCE inflation. The second estimate of Q4 GDP Growth is also available.

The US Equities index fell 1.0% on Friday to reach the 14K level. This brought its weekly losses to 1.6%. The index trades at 16% lower than November's record highs of 16.75K. Bears expect the index to drop back towards the 13.5K region, which would indicate a 20% decline from the recent highs. This would confirm a bear market.

The Dow dropped 0.6% to test the 34K level. This also means that the index is on track for a second consecutive week of losses. The index is now almost 5.0% lower than last week's highs of 35.8K. The S&P 500 CBOE Volatility Index, or VIX, commonly referred to as Wall Street’s "fear gauge", was slightly higher at 28.00s. This is a more than four-point rebound from the earlier weekly lows of 24.00.