Company / Analytics

Week 10 in Brief

North America

• U.S. stocks closed lower Friday, booking another week of losses, after President Joe Biden called for a suspension of normal trade relations with Russia as part of sanctions designed to economically isolate Moscow for its unprovoked attack in Ukraine.
• Tentative optimism about the war, tied to comments Russian President Vladimir Putin reportedly made about “positive” shifts in talks with Ukraine, faded after Ukraine’s foreign minister said he didn’t see any progress in Russian-Ukrainian talks.

How did the major indices perform?

• The Dow Jones Industrial Average slid 229.88 points, or 0.7%, to end at 32,944.19, giving up modest gains earlier in the session.
• The Nasdaq Composite dropped 286.15 points, or 2.2%, to finish at 12,843.81.
• The S&P 500 Index fell 55.21 points, or 1.3%, to close at 4,204.31, with losses led by the communication services, information technology and consumer discretionary sectors.
• For the week, the S&P 500 lost 2.9%, while the Dow slid 2% and the Nasdaq dropped 3.5%. The Dow has seen five straight weeks of losses, its longest losing streak since the stretch ending May 31, 2019, while the S&P 500 and the Nasdaq each booked a second consecutive week of declines, according to Dow Jones Market Data.

What drove the US market?

• Geopolitics: U.S. stocks sank Friday as investors remained focused on headlines tied to Russia’s ongoing invasion of Ukraine that began more than two weeks ago. Biden called for an end of normal trade relations for Russia over its invasion of Ukraine and acknowledged the economic hardship the world will endure as it aims to isolate Russia by revoking its most-favored nation trade status, which the president says will make it even harder for Moscow to do business. Biden said Western nations were showing restraint to avoid starting World War III..
• Economic Data: Data showing a bigger than expected drop in U.S. consumer sentiment in the month of March weighed as well on the market. Consumer sentiment in the U.S. fell to its lowest level in over ten years in the month of March, according to a report released by the University of Michigan. The consumer sentiment survey showed expectations for inflation over the next year rose to 5.4%, from February’s expectation of 4.9%, marking the highest level since 1981. Inflation expectations over five years held steady at 3%. The findings come after consumer price data released Thursday showed U.S. February consumer prices rose to 7.9%, a 40-year high, and some see that worsening due to the Russia-Ukraine war.
• The Federal Reserve is widely expected to raise interest rates at the two-day Federal Open Market Committee (FOMC) meeting that begins on Tuesday, and although Fed Chair Jerome Powell previously stated he would support a quarter-percentage-point rate hike, he said the central bank would closely monitor the impacts of developments in Ukraine.

Which US stocks were in focus Friday?

• Major U.S. indexes suffered another week of losses, as investors grappled with the continuing Russia-Ukraine war. Technology stocks in particular have suffered as bond yields have climbed steadily this week, suggesting that worries about inflation and coming central bank interest-rate increases hold a greater sway with markets than the likely impact of the Ukraine war.
• Nike, Apple, JP Morgan, 3M, Microsoft and Intel declined 1.7 to 2.7 percent. Several other top stocks, including United Health, Walt Disney, Boeing, P&G, Honewell International, Goldman Sachs and American Express also ended notably lower.
• Shares of DocuSign Inc. tumbled 20.1% after the online-signature company’s annual guidance disappointed late Thursday.
• Rivian Automotive Inc. shares fell 7.6% after the electric-truck maker said it lost more than $2 billion in the fourth quarter, amid continued supply-chain disruptions.
• Consumer discretionary stocks Tesla, Las Vegas Sands and Etsy Inc. posted sharp losses.
• Shares of Meta Platforms fell sharply amid concerns that the user growth could slow further after Russia restricted access to the group’s Instagram platform and launched a criminal probe in the company following social media giant changing its policy on hate speech to allow statements such as “death to Russian invaders” on its platform.

How did the European markets perform?

• Major European markets showed significant moves to the upside on the day. The German DAX surged up 1.38 percent, the U.K.’s FTSE 100 advanced 0.8 percent and France’s CAC 40 moved up 0.85 percent. The pan European Stoxx 600 climbed 0.95 percent.
• The stocks rose on signals from Russian President Vladimir Putin about a positive shift in talks with Ukraine, which talks have since been watered down by Ukranian Foreign minister.
• The European Central Bank on Thursday paved the way for an interest rate hike as soaring inflation outweighed concerns about the fallout from Russia’s invasion of Ukraine.
• Euro zone banks recovered 4.5% this week, posting their best week in two months, after dropping nearly 19% last week due to their large exposure to Russia. Meanwhile, investors stampeded out of European equities at their fastest pace on record, the Bank of America said in a weekly report, with investors pulling out $13.5 billion from European stocks as the war forced investors to seek shelter in safe-haven assets such as gold and cash.
• Goldman Sachs downgraded its 2022 euro area growth forecast on Thursday to 2.5% from 3.9%, citing risks of further escalation in the Russia-Ukraine crisis.

How did Asian markets perform?

Stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan’s Nikkei 225 Index plunged by 2.1 percent, while Hong Kong’s Hang Seng Index dove by 1.6 percent.

Bonds

The yield on the 10-year Treasury note was little changed Friday at 2%, but it rose 28.2 basis points this week for the largest weekly gain since September 2019 based on levels at 3 pm Eastern Time. Yields and debt prices move opposite each other.

Commodities

• Oil price rose with the U.S. benchmark WTI up 2.9% to around $109 per barrel, while international standard Brent crude moved 2.9% higher to around $112. Still, crude prices are well off the highs seen earlier in the week.
• Metals prices except for copper fell sharply. Palladium futures tumbled 4% to $2,803.50 an ounce.
• Gold futures for April delivery fell 0.8% to settle at $1,985 an ounce.
• Agricultural commodity prices turned mixed and bond yields were mostly higher, though only slightly.

Currencies

• The dollar rose on Friday, notching a five-year high against the safe-haven yen, while commodity-linked currencies slumped after Russian President Vladimir Putin said there had been some progress in talks between Moscow and Ukraine.
• The dollar initially declined on the news, but then gradually firmed and was last up 0.76% against a basket of six global peers at 99.11. The index was on track for a 0.56% increase for the week, following last week’s 2% rise, which was its largest weekly percentage gain since April 2020.
• The greenback hit a five-year high against the Japanese yen, which was down 1.03% at 117.32 yen .
• Bitcoin slid 1.64% to $38,798. It had surged this week after U.S. President Joe Biden signed an executive order on Wednesday requiring the government to assess the risks and benefits of creating a central bank digital dollar.

Next Week

Market will digest earnings reports from several companies including Accenture, FedEx among others, and economic data from across the world.