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YTD: 5.79%

Wednesday, February 23, 2022

Geopolitical Strife Continues to Push Stocks Lower

U.S. equities finished lower (see below), with the S&P 500 venturing further into correction territory for the first time since mid-2020, as the markets continued to fret over events in Ukraine. 

After the movement of Russian troops into some of Ukraine's eastern regions, the country's Ministry of Digital Transformation said a mass cyberattack disabled bank and government websites, prompting further actions from Western governments. 

President Biden cut off resources to the two regions and announced further sanctions on Russia, while meetings scheduled between the U.S. and Russia have been tabled. Moreover, Germany halted the certification of the potentially key Nord Stream 2 pipeline. 

The markets also continued to grapple with elevated expectations of tighter global monetary policies, while digesting another round of earnings reports. Lowe's Companies rose following its quarterly performance and guidance, while Palo Alto Networks was higher on its report, though TJX Companies fell after missing expectations. 

The economic calendar was relatively quiet, but weekly mortgage applications fell amid the recent spike in interest rates. Treasuries lost ground, lifting yields, and the U.S. dollar ticked to the upside. Meanwhile, gold advanced and crude oil prices edged higher to add to yesterday's rally. 

Europe gave up a broad-based gain and finished mostly lower amid the geopolitical uncertainty and focus on global monetary policy tightening, while markets in Asia rebounded in lower volume with markets in Japan closed for a holiday.

The Dow Jones Industrial Average declined 465 points (1.4%) to 33,132, the S&P 500 Index lost 79 points (1.8%) to 4,226, and the Nasdaq Composite plunged 344 points (2.6%) to 13,037. In heavy volume, 5.0 billion shares of NYSE-listed stocks were traded, and 4.8 billion shares changed hands on the Nasdaq. WTI crude oil nudged $0.19 higher to $92.10 per barrel. Elsewhere, the gold spot price advanced $3.00 to $1,910.40 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was up 0.2% at 96.22.

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