romaine: this is a special edition of bloomberg markets: the close. i'm romaine bostick, alongside caroline hyde and kailey leinz. we opened at the session here, nine: 30 a.m. new york time, and were talking about a nasdaq 100 that was heading into a bear market here. down as much as 3% here on the day but managed to finish the day higher by 3.4 percent, after we learned of the u.s. response to the incursion by russia into ukraine. at least among song investors, they claimed to not be as damaging to the global economy

as some people had started to price into the market a little bit earlier. the s&p 500 was also down on the day. it still remains around correction territory there, but finished the day higher by one .5%. the dow jones industrial average opened in correction territory and managed to drag its way slightly out of it, calling it unchanged on the day. but that slide into haven assets we saw into treasuries and the dollar, that still helped to a certain extent. the index is up about .9% here, giving you a sense that people are still fleeing for some of those haven trades. at the bottom of your screen is the msci emerging markets index, down 4% on the day. it will be interesting to see, once you start to get markets opening in australia, asia, and back in europe, where we could see some of this translate into the rest of the world. caroline: global ramifications have been enormous and the global response has been to.

eaters around the world reacting swiftly to the russian invasion of ukraine. u.k. prime minister boris johnson announcing additional sanctions against russia. take a listen. >> we have cut off russia's largest bank, that holds more than one third of russia's banking assets by itself. we have cut it off from the u.s. financial system. next we will of course use britain's position in every international forum to condemn the onslaught against ukraine. >> we are working out with countries around the world. >> we will continue to squeeze russia from the global economy piece by piece, day by day, and week by week. we are not going to harm the world economy system we are a part of as long as we are a part of it. i believe our partners have to understand that we do not aim to

push us out of the system. caroline: joining us now for key expertise in this military arena is retired u.s. army lieutenant pearl on -- lieutenant colonel alexander vindman. you might remember his testimony in the trump-ukraine scandal, and a man who was born in ukraine. deeply personal, i'm sure, for you, lieutenant. i wanted to get your take on the steps that have thus far been taken. we understand from western officials that key have -- that kyiv could fall within hours. lt. col. vindman: i don't think so. one of the things i noted, russian forces, although severely outmatched, ukrainian forces have underperformed. they didn't land those with

ering blows, the shock and campaign was a bit more of a whimper, they did not sever political leadership, they did not take out communications nodes, they did not destroy the ukrainian air force, which, frankly, is rock -- is miraculous, that something still exists there. they came in quickly with ground forces and are encountering heavy resistance. armed forces are fighting for their home, they are fighting for freedom and democracy, those concepts, but they are fundamentally fighting for their homes. it's too early to tell, but the ukrainian ministry of defense said something interesting. if it bears out true -- the ukrainians have been pretty good about accurate reports. there was a large aerosol with russia's elite forces lending to the north and west of the capital of ukraine, kyiv. they seized an airfield. according to the ukrainian

ministry of defense, this is likely to play out over the course of a much longer period of time. kailey: ukraine is putting up a fight. i am wondering about the u.s. response. in the testimony from congress we mentioned, what concerned you about the conversation we volodymyr zelensky and president trump, that may damage the growing relationship between u.s. and the -- between the u.s. and ukraine. lt. col. vindman: i think that was a facet of what i was talking about. fundamentally, my concerns were about u.s. national security interests and that ukraine was a strategic partner and in harming that relationship, we are harming u.s. interests. that has -- i came to the u.s.

when i was four years old, so this has always been my parents concern. as far as the reaction from the u.s., i am disappointed. the markets say it all. the smart money looked at the potential range of sanctions and said that these were not as bad as they could be. markets seem to rebound. i will follow the lead of the markets. i think there is a lot more headspace that the administration is seeing, for what reasons i am not sure, and we could do more on the sanctions side. this is a significant situation. it is likely to reshape geopolitical environments, so we need to act appropriately to it. romaine: i'm curious. not only were you when the trump administration, but you have been in the room for a lot of conversations for other administrations when it comes to military affairs and strategy here. if you were in the room right now with this administration, would you advise taking a more formal military stance to this

incursion? lt. col. vindman: i would. there are things we can do, frankly, there are more things we could have done yesterday. 12 hours ago, before this started, it was a symbol or geometry. we could have provided more with regards to armed defensive lethal aid, air defense, coastal defense, cruise missiles, we could have threatened russian naval forces. but now it has become more complex, because russian soldiers are dying, and that becomes risky. i would recommend still supplying ukraine, but being more cautious. certainly on the nonlethal side, there should be no restrictions. romaine: but when you hear the president of the united states say there will not be boots on the ground in ukraine, is that semantics? is there still an optionality that we could airstrikes or some sort of soup that maybe doesn't actually physically put boots on the ground? lt. col. vindman: no, i don't

think so. this administration has zero appetite for any bilateral wrist with regards to russia. we have staked out a very, very firm position about defending nato, but ukraine is basically on its own, unfortunately. at least at this point. if this gets protracted, and there are many, many more casualties in the u.s. gets dragged in, that's why i think these stark positions are unwise. i don't know if he can hold to that. so we may end up in a different place. once the fog of war starts to lift and we see the violence. caroline: what about the rest of eastern europe? lt. col. vindman: this is a critical question. while i think it was unwise to say that russia has influence, by saying our interest and nato's boundaries, it's a very unwise position to be in. that leaves a whole bunch of

countries vulnerable, including some close allies like finland, sweden, that now have to think about whether they want to be inside of nato, because that's where the protection is. but eastern europe is very, very volatile. they are in a situation where they will deal first-hand with the refugee flows. those can be as high as 5 million people flowing into those adjacent countries. i think these countries are also feeling the acute pressure of russia creeping up to their borders. they said they would provide ukraine with weapons. how does that play out? does russia allow safe havens and weapons come from these countries? these are difficult questions. it would have been much better to avoid this the now have to deal with these very challenging issues. kailey: challenging indeed, and important point on the refugees. we cannot lose sight of the human cost of war. lt. col. alexander vindman, and

let's turn to today's big take. u.s. officials spent months debating, touting, and enacting a punishing array of economic sanctions, but many think the strategies probably would not work. the strategies are pressing today. let's bring in the reporter on that story. nick, if they knew likely it was not going to work, why not change strategy. was there just in case of there being no other option? >> it's a great question, and one i asked the roughly 2000 will i spoke to for this story. it was actually something that one administration official told me a couple of days ago. there was a real sense of what they called an era of inevitability over this invasion from the very outset. but rather discouraging them, that led them to think, we need to do everything we possibly can to try and prevented. that's why you saw this in

-- this copious intelligence sharing, and then chief lee, what they saw at their chief means of deterrence, was to threaten massive sanctions. unfortunately, as we have now seen, there was a fundamentalist symmetry all along in this situation, which was that vladimir putin was willing to use his military to take ukraine by force. he felt the ukrainians drifting towards the west was an existential crisis for him, and as you -- the lt. col. just said, the biden administration made a commitment from the start that they did not want to put roots on the ground. they are testing this notion that sanctions could be an effective deterrent while also understanding that it's probably just not going to work. caroline: of course, the president promised devastating packages of sanctions. the market does not seem devastated thus far, but could they become of us dating?

would president biden was saying , europe is not an board of kicking russia out of switzerland, for example, is that enough? would that be a deterrent or would he actually know? >> this is the key issue everyone will be watching. when we have this sanctions announcement, there is often an expectation that the reaction will be immediate. it will reduce vladimir putin to his knees and call -- because the immediate re-treat from ukraine. now they are putting in place sanctions they say will fundamentally restrict russia's economy over the long run. so president biden in his remarks today said, this is something where we are not going to know the impact for weeks. officials i have talked to have said it could be months or years. vladimir putin has much broader strategic ambitions for his

country, so when you look at cutting off those banks and oligarchs and some of the export control from the u.s. is pushing in, they are seeing this on a longer time horizon. romaine: but how much damage can be done by putin on that time horizon? how much was that discussed in these meetings, and do you think they have a sense, i am talking about the biden administration, that for putin, ukraine is the prize and he is willing to sacrifice a lot to get it? >> the issue, they have the goal of pushing these sanctions to restrict the russian economy. but since they posted sanctions in 2014, that as the sanctions squeezed, the economy can adapt. after 2014, you had the emergence of a stronger agricultural sector in russia that just didn't exist before that. there was no domestic cheese industry, for example, and that's now been created. it's a small example, but a

telling one. the fear here is, we are going to deny certain exports to russia, like microchips and other sensitive technologies. what if russia goes to its next-door neighbor, china, and says, we want to get that from you? the u.s. has this financial leverage it wants to use against russia, but if it uses it too much, that forces russia to adapt and make its economy even more resilient so that if you try to do this again in the future, russia essentially becomes immune to it. i think they are aware of those challenges, but it will be a race against time in the next months and years. romaine: nick -- kailey: nick, thank you for joining us. you can find that story on quicktake go, as well as online. listen to what nato secretary-general in-state berg said earlier about the russian invasion. >> this is a deliberate, cold-blooded and long planned

invasion. despite its litany of lies, denials and disinformation, the kremlin's intentions are clear for the world to see. ♪

♪ caroline: an extraordinary day when it came to the u.s. market dips. the market gyrations that push higher. what will happen in friday's asia trading following the russian invasion of ukraine? we get the cross asset look from shery ahn. as we brace ourselves to see the opening of new zealand,

australia, how is sentiment looking? shery ahn: we saw the invasion occurred during our asian hours last night, so the asian markets plunged the most in about a year. the markets in india and singapore and hong kong really fell more than 3%. we did see a lot of downside pressure when it came to the semiconductor area, with the lights of -- falling, because they have exposure to ukraine when it comes to some of those raw materials. interestingly, the stock markets fell, but we have been talking about the yuan, which has been resilient. romaine: we saw some safe haven trades, and the yuan was part of that. bonds also actedace for some folks to camp out. shery ahn: we saw the dip in the yuan against the u.s. dollar, but it is still trading at a four-year high against the u.s.

dollar. this is against a basket of peers. it still around that six year high. we continue to see these calls, that perhaps we should be adding china exposure. this into what investor mark mobius had to say. >> i think china is going to be a safe haven, because they continue to produce, they continue to grow, rates are going down in china. >> you mentioned australia, new zealand, how the bond markets their reacted, and that also has to do with the fact that we are seeing central banks start to hike across asia. we will be speaking to the governor tonight about the inflationary concerns in the region as well. kailey: and for australia and new zealand, commodity sensitivity as well. shery ahn: we have seen the likes of coal miners in indonesia that rose to multiyear highs, and you might expect australia to do well, but we saw the worst day since september

2020, because we had miners being pressured after rio tinto flagged pressures that could affect their business this year. we saw them pull back the markets in australia and new zealand as well. romaine: this is the global story. we are a global network, and soon we will be passing to tom and shery ahn. you can catch her every day on bloomberg: daybreak asia. we will be right back. ♪

caroline: in terms of geopolitics, an emotional day. in terms of the markets, while they. u.s. trading stocks telling off to start, now rallying higher

into the close. the nasdaq with some extraordinary moves, from -3% to plus 3%. and not what many investors were expecting when they first moved into today's trading. katie greifeld has been managing the phones since she got off her own show on quicktake. >> i spoke to plenty of investors and analysts today. there is no good reason for why we all turned around. if you look at the tactical reasoning, you probably had short-term traders see how oversold things have gotten and decided to go. the fact that tesla is a rebound, because tesla was the second that was most beaten up. if you want to macro reason, if you look at what stocks are pricing and for the federal reserve, some of the most aggressive bets have started to be pulled back. kailey: i was on 12 hours ago.

it feels like a separate day. if you have a guest what i will be facing 12 hours from now, what does today look like after today? katie: with this boomerang market we have been living in, the mood music tends to change almost every night when you look at the futures. that's what we saw last night and last week. we will see. nothing has really changed so far. sure, we did get more details on what the u.s. response is going to be, but anyone i could ask today would not guess about what would happen overnight. romaine: what are people saying about the volatility? for the short-term traders, these are the days they love here. we saw bonds go through the roof , second-biggest volume day so far this year, and even for volume traders, we hear the idea of longer-term investors. the idea that overall fundamentals you are looking at in regards to economic growth, that's still relatively intact. k if youa look at earnings asked

amids -- katie: if you look at earnings estimates, they have not budged, but it will be the final move going forward. energy might be a place to hide out, but a lot depends on what happens with the commodities markets at this point. caroline: katie wright fell, keeping us honest on what traders are saying. romaine and kaylee -- kaylee, the fact that you are back here, kudos to you for powering through and giving us such expert analysis of it all. kailey: it's great to join you guys. it has been a crazy day, but there will be more to come. this is not just a one-day story, this will play out over time. romaine: and we are a market show, we do focus on the markets, but we cannot forget the human toll of this year. we have not gotten a full picture of exactly what has happened on the ground there. we know as we heard from the

turn and colonel vindman, this is something that could drag out for some time. caroline: that does it for this very special edition of bloomberg markets, marrying the market impact and the emotion of the day. join us from the asian perspective now. this is bloomberg. ♪

>> a very good morning and welcome to daybreak australia. caroline: we are counting down to asia's major market open. this is the picture cross wall street, the s&p 500 falling throughout the day. this