The Long and Short of it, week ending 04 Mar 2022

Publication Type: Market Commentaries

U.S. stock markets continued to be dominated by the Russia-Ukraine conflict (and ensuing Western sanctions) with stock prices moving lower amidst higher-volatility, a significantly stronger U.S dollar, falling longer-term U.S. Treasury rates and sharply rising commodity prices. Fed Chairman Powell’s comments Wednesday before Congress stating rate increases were likely to begin in March but would proceed with caution in light of the Russia-Ukraine conflict engendered the only positive day for stock markets with all three major stock indexes increasing more than 1 ½ percent. Oil and wheat prices, up almost 25% and 40%, respectively, on the week, increased fears of slower global economic growth adding to downward pressure on stock prices. Increased demand for haven investments moved gold prices and the U.S. dollar higher and U.S. Treasury rates lower over the week. Friday’s much stronger-than-expected Non-Farm Payroll Report was overshadowed by Russia’s bombing of a Ukraine nuclear power plant pushing oil prices 7% higher, 10-year U.S Treasury rate 10bps lower and strengthening the U.S. dollar 0.9%. For the week, the S&P 500 decreased 1.3% to 4,328.87, the Nasdaq Composite Index dropped 2.8% to 13,313.44, the Dow Jones Industrial Average lost 1.3% to close at 33,614.67, the 10-year U.S. Treasury rate fell 23bp to 1.74% and the U.S. dollar (as measured by the ICE U.S. Dollar index - DXY) strengthened 2.1%.

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The Long and Short of it, week ending 04 Mar 2022

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