Market Commentary — February 28, 2022

Market volatility sits at a two-year high as Russia invaded Ukraine. On the news of the invasion, the NASDAQ Composite swung by 6.8%, the largest intraday swing since the day WHO declared the start of the pandemic in March of 2020. Although the Russian invasion was not entirely a surprise, a broad-scale invasion was, and news of attacks on the capital city Kyiv and other major cities on Wednesday evening and Thursday morning sent global markets roiling.

On Thursday, the S&P 500 sat firmly in correction territory, down 15% for the year. The conflict also sent shock waves through the fixed income markets, as investors rushed into perceived safe havens like US Treasuries and gold, sending yields lower and the US dollar higher, particularly against the Russian ruble and other emerging market currencies. But bond yields reversed direction and increased, and stocks rallied on Friday.

As we surveyed the damage at a stock and index level, many Russian-domiciled and Russian-exposed names were down sharply on Thursday, erasing more than $150 billion in value, only to rally back on Friday, creating quite the whipsaw action. The benchmark MOEX Russia Index is down about 50% from its October record high, making it the worst-performing stock market globally this year.

In the week ahead, governments will be pushing for sanctions, but with a hands-off attitude toward Russian crude oil. The strategy will aim to maximize pain on Putin and Russia while avoiding fallout for the US and Europe. One proposed sanction gaining traction is cutting Russia out of the SWIFT (Society for Worldwide Interbank Financial Telecommunication) global payment system, but several European leaders would prefer to stay patient fearing a ban could make international trade more difficult and hurt their economies.

Here’s a great piece written by the BBC explaining Why is Russia invading Ukraine and what does Putin want? But at the end of the day, as the globe tries to resurrect itself post a global pandemic, it is hard to make sense of any of this.

Prayers for the people of Ukraine and for peace.

Jane Edmondson
CEO and Co-Founder

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EQM Indexes LLC is a woman-owned firm dedicated to creating and supporting innovative indexes that track growth industries and emerging investment themes. Co-founded by Jane Edmondson, a former Institutional Portfolio Manager with more than 25 years in the investment industry.


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