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.
CEO and Co-Founder