The Profit Margin: March 21, 2022
Statistic of the Week
The pandemic and geopolitical crisis in Ukraine are impacting confidence in retirement planning. 45% of respondents to a recent survey between 18-35 said that they “don’t see a point in saving for retirement until things return to normal.” Volatility should not negate prudent planning.
Global Perspective
The invasion of Ukraine has caused Russia to face severe economic consequences. Approximately 330 multinational companies have left or plan on leaving Russia. Many economists now predict that the Russian economy will fall to levels last seen in the early 2000’s as a result of coordinated action.
Market Moving Events
Wednesday: New Home Sales Thursday: Jobless Claims, Durable Goods Orders Friday: Consumer Sentiment, Pending Home Sales
Commentary
As volatility worked its way lower last week, the S&P 500, DJIA, and Nasdaq all had their best weekly performance since November 2020.1 The Nasdaq was the week’s best performer, rallying 8.18%.2 The S&P 500 put in a sizable gain of 6.16%,2 while the DJIA brought up the rear, rising 5.50%.3 Strength in equities caused fixed income yields to move higher on the week. The 10-year Treasury yield rose 0.15%, and finished Friday at 2.15%.4 The Federal Reserve began its much-anticipated tightening process. The nation’s central bank raised the target interest rate by 0.25%.5 As a result of the Fed’s statement and Chair Powell’s statement, the official forecast is now for six to seven rate hikes in total for 2022.6 Additionally, the Fed now believes that inflation will finish the year around 4.3%, and will moderate in 2023 and 2024 with rates of 2.7% and 2.3%, respectively.7 And while the statements were viewed as a touch more hawkish than analysts expected, the commentary and policy actions did not take the wind out of the sails for last week’s rally in the equity markets. The week ahead is very light on economic data releases. Earning’s announcements for the first quarter will also mostly wrap up by Friday. The lack of scheduled economic news could cause an uptick in volatility. – Dan McElwee, CFP, ® MBA
Chart of the Week
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Sources
Statistic of the Week:
Businessweek
Global Perspective:
The New York Times
Market Moving Events:
MarketWatch.com
Chart of the Week:
Haver, Clearnomics, The Conference Board
Commentary:1. Barron’s2.Bloomberg3.Bloomberg4.Bloomberg5. The Wall Street Journal6. Barron’s7. Barron’s