Market Commentary — March 7, 2022

Stocks ended the week lower during a volatile week when investors continued to weigh developments related to the situation in Ukraine. The energy sector was the best performer, as international oil prices approached $120 per barrel. Oil is playing a balancing act between trying to punish Russia with sanctions and hurting Europe and the US with higher oil prices. Not surprisingly, the VIX reached its highest level in a year, closing the week just below 32.

Some of the week’s major developments were as follows:

1) The EU, UK, and US agreed to exclude several Russian banks from SWIFT.
2) Western powers announced further sanctions against Russia and leading index providers (including EQM) announced they would be removing Russian securities from their indexes. Here is the link to our announcement.
3) Putin raised the stakes with nuclear threats.
4) The value of the ruble plunged more than 30% relative to the dollar.
5) The UN denounced Russia’s action to invade Ukraine, increasing its isolation on the global stage.
6) The US announced new penalties targeting Russian oligarchs with close ties to Russian President Vladimir Putin.

Fed Chairman Powell calmed investors stating the Fed would move slowly on interest rate hikes, favoring only a 25 bps hike in March. The futures markets have begun pricing in a small probability of no hike at all, according to CME Group data.

In ETF news, the NYSE suspended trading in three Russian-exposed ETFs: iShares MSCI Russia ETF, Franklin FTSE Russia ETF, and the Direxion Daily Russia Bull 2X Shares due to regulatory concerns. The Cboe BZX Exchange also announced after the close of trading that the VanEck Russia ETF (RSX) and the VanEck Russia Small-Cap ETF (RSXJ) were halted as well.

And Charles Schwab filed for a ‘Crypto Economy ETF’ With SEC, which is expected to trade on the NYSE.

Have a great week everyone. Here’s to peace in Ukraine.

Jane Edmondson
CEO and Co-Founder

About

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.

Disclosure

The information provided on this page is for illustrative purposes only and is not intended to serve as investment advice. The information provided is as of particular time and subject to change at any time without notice.

It is not possible to invest directly in an index. Exposure to an asset class represented by an index is available through investable instruments based on that index. EQM Indexes does not sponsor, endorse, sell, promote or manage any investment fund or other investment vehicle that is offered by third parties and that seeks to provide an investment return based on the performance of any index. EQM Indexes Indices makes no assurance that investment products based on the Index will accurately track index performance or provide positive investment returns. EQM Indexes is not an investment advisor, and makes no representation regarding the advisability of investing in any such investment fund or other investment vehicle. A decision to invest in any such investment fund or other investment vehicle should not be made in reliance on any of the statements set forth in this article. Prospective investors are advised to make an investment in any such fund or other vehicle only after carefully considering the risks associated with investing in such funds, as detailed in an offering memorandum or similar document that is prepared by or on behalf of the issuer of the investment fund or other vehicle. Inclusion of a security within an index is not a recommendation by EQM Indexes to buy, sell, or hold such security, nor is it considered to be investment advice.