The Markets (as of market close February 11, 2022)
The major benchmark indexes closed last week lower. Rising tensions over the Russia-Ukraine situation coupled with rising inflation made investors a bit skittish towards stocks. A higher-than-expected jump in the Consumer Price Index added to jitters over an accelerated tightening of the Federal Reserve’s monetary policy. The Nasdaq, the S&P 500, and the Dow lost value last week, while the Russell 2000 and the Global Dow advanced. As of late Friday afternoon, concerns increased that Russia could invade Ukraine “any day now.” An invasion would likely spur sanctions against Russia’s exports of oil and gas, causing supply to decrease and prices to rise. Crude oil prices rose nearly 1.7% last week following Friday’s 4.0% jump in the price per barrel. Ten-year Treasury yields were volatile last week, reaching 2.0%, only to drop back down to 1.95% by the end of the week.
Last Monday saw Wall Street end lower as stocks gave back gains from earlier in the day. The Nasdaq fell 0.6%, while declines in communication services and information technology dragged the S&P 500 (-0.4%) lower. The Dow was flat, while the small caps of the Russell 2000 and the Global Dow each advanced 0.5%.
Stocks rose last Tuesday, even as bond yields approached their highest levels since November 2019. Ten-year Treasuries jumped 4 basis points to close at 1.95%.
Tech shares led a broad-based stock market rally last Wednesday. Megacaps helped drive the Nasdaq up 2.1% while the S&P 500 advanced 1.5%. The Russell 2000 continued its upward trend after adding 1.9% last Wednesday. The Global Dow gained 1.0%. Ten-year Treasury yields retreated from the prior day’s advance, closing at 1.92%.
Each of the major benchmark indexes lost ground last Thursday on the heels of the largest annual increase in the Consumer Price Index (7.5%) since February 1982. The noteworthy jump in price inflation adds to the likelihood that the Federal Reserve will be more aggressive in pushing the federal funds rate higher beginning in March. The Nasdaq fell 2.1%, the S&P 500 lost 1.8%, the Russell 2000 slid 1.6%, the Dow dropped 1.5%, and the Global Dow dipped 0.6%. Ten-year Treasury yields jumped 11 basis points to 2.03%. Crude oil prices climbed to $90.02 per barrel.
Stocks closed sharply lower last Friday amid rising Russia-Ukraine tensions. Information technology slumped over 3.0% on the day, pulling the Nasdaq down 2.8%. Energy climbed higher, although the remaining market sectors slid lower. The S&P 500 fell 1.9%.
Eye on the Week Ahead
Inflation and housing information take the stage this week. Inflationary indicators available this week include the latest Producer Price Index, import and export prices, and the retail sales report. Producer prices slowed in December, increasing only 0.2%. However, since December 2020, producer prices rose nearly 10.0%.
All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Forecasts are based on current conditions, subject to change, and may not come to pass. U.S. Treasury securities are guaranteed by the federal government as to the timely payment of principal and interest. The principal value of Treasury securities and other bonds fluctuates with market conditions. Bonds are subject to inflation, interest-rate, and credit risks. As interest rates rise, bond prices typically fall. A bond sold or redeemed prior to maturity may be subject to loss. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.
The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 largest, publicly traded companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indexes listed are unmanaged and are not available for direct investment.
