The Markets (as of market close February 25, 2022)
Stocks closed mostly higher last week, despite a tumultuous week with the Russian invasion of Ukraine. Of the benchmark indexes listed here, only the Dow and the Global Dow closed the week in the red. The Russell 2000, the Nasdaq, and the S&P 500 each posted solid gains. While the world reacted to the conflict in Eastern Europe, traders sought domestic stocks, driving values higher. Apparently, some investors may be viewing the Russia-Ukraine conflict as a reason to believe the Federal Reserve may not be quite so quick to jack up interest rates. However, with prices continuing to rise even before the turmoil in Europe, inflationary pressures are likely to accelerate due to disruptions caused by the war, which would seem to increase the likelihood of a more aggressive stance by the Fed. Much is still to be determined in the weeks ahead.
Growing tensions between Russia and Ukraine pulled stocks lower last Tuesday to start the holiday-shortened week. Both the Russell 2000 and the Dow closed down 1.4%, while the Nasdaq lost 1.2%. The S&P 500 and the Global Dow each fell 1.0%. Ten-year Treasury yields rose, while the dollar was flat. Crude oil prices increased to $92.27 per barrel. Earlier on Tuesday, NATO Secretary-General Jens Stoltenberg said that Russia’s recognition of two separatist regions in Ukraine could be viewed as a prelude to a large-scale assault. In response, several Western leaders unveiled a series of sanctions targeting Russian banks and financial firms.
As Russia moved closer to a full-scale invasion of Ukraine last Wednesday, tensions mounted globally. Sanctions were either threatened or imposed by the United States and other Western countries, prompting retaliatory rhetoric from Russia. Then, late Wednesday, as anticipated, Russia launched a military attack on Ukraine. Unsurprisingly, stocks extended losses. The Nasdaq shed 2.6% as technology stocks sold off amid fears of Russian cyberattacks. The S&P 500 fell 1.8%, falling deeper into correction territory. The Russell 2000 lost 1.8%, the Dow dropped 1.4%, and the Global Dow slid 0.9%. Yields on 10-year Treasuries rose nearly 3 basis points to 1.97%. The dollar was little changed. Crude oil prices surged, nearing $100.00 per barrel. Gold prices reached $1,910.80 per troy ounce, the highest value in more than a year.
Equities rebounded last Thursday following President Biden’s announcement of new sanctions against Russia after its full-scale invasion of Ukraine. Tech stocks, which had been hard-hit, led the surge, pulling the Nasdaq up 3.3%. The S&P 500 advanced 1.5%,
while the Dow gained 0.3%. The small caps of the Russell 2000 advanced 2.7%. The Global Dow fell 2.3%. Along with technology, communication services and consumer discretionary moved higher. Ten-year Treasury yields declined, closing the day at 1.96%. Crude oil prices and the dollar rose. Not unexpectedly, the Cboe Volatility Index reached its highest level in 15 months.
Despite global economic turmoil caused by the ongoing Russian onslaught of Ukraine, domestic markets seemed to be impervious to that tumult. Each of the benchmark indexes posted solid gains last Friday, led by the Dow (2.5%), the Russell 2000 (2.3%), the S&P 500 (2.2%), and the Nasdaq (1.6%). Even the Global Dow advanced nearly 3.0% by the close of trading. And while Brent crude oil prices surged, New York Mercantile (CL=F) crude oil prices dropped nearly 1.0% to close the day a little over $92.00 per barrel. The dollar and gold prices also fell, while 10-year Treasury yields advanced. Cl ick here for the entire article:Winthrop Partners’ Market and Economic Update 2-28-22
Thomas Saunders is the Managing Partner of Winthrop Partners. Prior to founding Winthrop Partners, Tom was Senior Vice President at what is now JP Morgan. His career includes senior and executive roles at Brown Brothers Harriman and First Niagara Bank, a top 25 Bank. Click here to contact Thomas Saunders about your investment and planning requirements.