QUOTE OF THE WEEK
“The strongest of all warriors are these two — Time and Patience.”
LEO TOLSTOY
THE WEEK ON WALL STREET
Intensifying hostilities in Ukraine continued to unsettle markets, as investors grappled with the war’s impact on the global economies.
The Dow Jones Industrial Average lost 1.99%, while the Standard & Poor’s 500 dropped 2.88%. The Nasdaq Composite index fell 3.53% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 0.90%.1,2,3
MARKETS REMAIN STRESSED
Markets gyrated last week as Russia escalated its attacks on Ukraine, the U.S. banned imports of Russian oil, and more companies announced the suspension of business in Russia. Eastern Europe has added complexity to the Fed’s plans for raising interest rates to manage accelerating inflation, which has been exacerbated by a sharp rise in energy and other commodity prices.
The stock market saw brief moments of respite. Stocks rallied Tuesday on a news report that Ukraine would promise not to pursue NATO membership, but lost momentum before the close. Stocks rallied on Wednesday as oil prices tumbled, but were unable to follow-through on Thursday and then faded further into Friday’s close.
A FOUR-DECADE HIGH
Consumer prices rose 0.8% in February as energy and commodity prices pushed higher. This latest monthly report showed a year-over-year inflation rate of 7.9%, the highest level since January 1982. Excluding the more volatile food and energy prices, the 12-month increase was 6.4%, a slight bump from last month’s 6.0% year-over-year increase.4
Many economists hoped that inflation pressures would ease, but February’s inflation number suggested that the impact of sanctions and supply-chain disruptions due to the invasion of Ukraine may likely feed further price increases for the foreseeable future.
BY THE NUMBER$
ADDING TO CASH - Money market funds in the United States (including retail and institutional funds, both taxable and tax free) have increased $799 billion (to $4.6 trillion from $3.8 trillion) over trailing 24 months as of last Friday 3/11/2022, an average increase of $1.1 billion a day.
LESS THAN WHAT YOU THINK? - The average single family home in the United States has appreciated just +4.7% over the 25 years from 12/31/1996 to 12/31/2021 (source: Federal; Housing Finance Agency).
IMPORTS FROM RUSSIA AND CHINA - US consumers imported $29.7 billion of goods from Russia in 2021. US consumers imported $506.4 billion of goods from China in 2021 (source: Department of Commerce).
THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: Producer Price Index.
Wednesday: Retail Sales. Federal Open Market Committee (FOMC) Announcement.
Thursday: Housing Starts. Jobless Claims. Industrial Production.
Friday: Existing Home Sales. Index of Leading Economic Indicators.
Source: Econoday, March 11, 2022
THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Monday: Coupa Software, Inc. (COUP).
Thursday: FedEx Corporation (FDX), Dollar General Corporation (DG).
Source: Zacks, March 11, 2022
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
T H E W E E K L Y R I D D L E
You are at sea, it is mid-July, and your ship has reached a unique spot on earth. If you sail north, it will be summer; if you sail south, it will be winter. If you sail east, it will be Friday, but if you sail west, it will be Saturday. Precisely where in the world are you? (Hint: your ship is in the Pacific Ocean, near the island nation of Kiribati.)
LAST WEEK’S RIDDLE: There is a word (four letters long) that begins with the letter I. If you put the letter A at the front of this four-letter word, it becomes a five-letter word which is pronounced exactly the same. Name both words?
ANSWER: Isle and Aisle.