NEW YORK (TheStreet) -- Investors aren't ignoring Ukraine risks, say cashtaggers on StockTwits.com. The economic fallout of the West's limited response to Russia's annexation of Crimea is largely priced-in -- even for Russia.
The S&P 500 and Dow (DIA) edged lower by mid-afternoon Wednesday after President Obama's fighting words for Europe. At a news conference after meeting with Western leaders, the president pressed European nations to spend more on defense in order to curb an expansionist Russia. The Nasdaq (QQQ) lost nearly a percent amidst talk of frothy tech valuations.
Market Vectors Russia, an ETF that tracks the performance of Russian stocks, gained 0.5% midday. Meanwhile, Direxion Daily Russia Bear 3x (RUSS), a 3X levered ETF inversely related to the performance of Russian stocks, fell more than 2%, sparking debate and earning it a spot on the StockTwits' trending bar, which tracks the most discussed tickers.
Market Vectors Russia, Direxion Daily Russia Bull 3x (RUSL) expecting profit about 5x risk if prices return to low normal 2013 range, hedged on the downside.
-- Market Collab (@marketcollab) March 25 at 01:04 a.m.
The U.S. and Europe have adopted sanctions on a Russian bank and key Russian leaders. The World Bank said that Russia's economy will grow by 1.1% in 2014, slightly less than last year's growth, assuming that the West's response is limited to current sanctions and does not expand to include trade sanctions. If war erupts, of course, all forecasts are off the table.
Many cashtaggers argued that trade sanctions -- let alone military action -- were not on the horizon. Europe is too reliant on Russian oil to risk them, they argued. Germany, Europe's strongest economy, imports more than a third of its oil and gas from Russia.
Market Vectors Russia: Thirdly, west needs access to Russian mkt and will end up rationalizing. Economic self interest wins.-- rogi volvap (@pavdog) March 25 at 12:55 a.m.
Of course, the belief that Crimea won't tank the markets isn't a call for the five-year bull market to continue. Sentiment on the S&P 500 is still 51% bearish, according to StockTwits' analytics. But fears that the underlying U.S. economy is not strong enough to sustain stock valuations without Federal stimulus is a large part of the bear argument. Another part of it is the charts are making people nervous.
Dow Jones Industrial Average Setting Up For A Very Bearish Scenario: Dow, S&P http://stks.co/c0N6u-- ETF Daily News (@ETFDailyNews) March 26 at 12:54 p.m.
At the time of publication, the author held no positions in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.