Weekly Market Commentary: Ukrainian War Impacts Global Economy

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 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 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.

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.

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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 Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.}

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.}

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