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The Long and Short of it, week ending 25 Feb 2022

The Long and Short of it, week ending 25 Feb 2022

Posted:
Publication Type: Market Commentaries

Another tumultuous week with U.S. stock markets falling precipitously the first two days of the holidayshortened week and then posting strong gains the last two days. Thursday was a particularly volatile day with
the S&P 500 Index reversing a 2.6% intraday loss to close 1.5% higher. Russia recognizing and deploying troops
to separatist strongholds in Ukraine and then actually invading Ukraine Thursday drove markets lower through
mid-day Thursday, dragging the S&P 500 into correction territory. Thursday’s end-of-day recovery and Friday’s
move higher was jump started by additional but less-harsh-than-expected U.S., UK and European sanctions on
Russia and reports Russia was willing to enter into negotiations with Ukraine but also with investor sentiment
moving from risk-off to risk-on with market participants believing markets were oversold. Friday’s greaterthan-expected PCE price index release seemingly had little effect on stock or bond markets. The 10-year U.S.
Treasury rate moved off its Tuesday’s lows of 1.87%, increasing 13bps through Wednesday and then dropping
slightly over Thursday and Friday to finish the week 4bps higher. 10-year real yields fell 8bps over the week
meaning 10-year inflation expectations increased 12bps to 2.56%. At week’s end, the S&P 500 increased 0.8%
to 4,384.62, the Nasdaq Composite Index rose 1.1% to 13,694.62, the Dow Jones Industrial Average edged
0.1% lower to 34,058.55, the 10-year U.S. Treasury rate increased 4bp to 1.97% and the U.S. dollar (as
measured by the ICE U.S. Dollar index - DXY) strengthened 0.6%

For More Detail read the following PDF.

The Long and Short of it, week ending 25 Feb 2022

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