Monday March 7, 2022
By Mark Sauer
As I write this, markets are currently down -2.32% (S&P) for the day. Fear of WWIII pervades the minds of many. Global sanctions on Russia are being coordinated at a level never seen before. Economists press further the concern of hyper-inflation – due to sanction, war, etc. – and, of course, polarization among media sources – political parties – continue to divide us.
Today – and all days – reach for your humility. Your humanity. Your empathy. And your critical thinking. Allow yourself to feel and understand the position of Ukrainian refugees (nearly 2 million so far), and Russian Citizens. And, of course, all other’s effected by tyrannical behavior which threatens democracy, freedom, love, and unity. I hope you take this time to strengthen bonds, not division.
Market update:
Global Equities: War in Ukraine rattled global equity markets, with volatile trading for most major indices amidst a high degree of uncertainty. The S&P 500 finished the week down -1.0%, the Nasdaq was down –3.2%, and the Dow Jones Industrial Average lost –0.8%. Developed international equities fared worse given their closer proximity to the conflict and Europe’s reliance on Russian natural gas, ending the week down –5.7% and Emerging Markets closed down –4.5%. It is worth noting that Russian stocks, which comprised a scant 3% of the Emerging Market index, have plummeted severely amidst global sanctions. The Russian stock market was closed all week, limiting price discovery and liquidity, however foreign ADR shares of most major Russian companies were down 90% or more. With Russian stocks essentially worthless, major index providers have removed the nation from Emerging Market indices. Foreign investors will have no way of accessing Russian markets, with the few existing Russian ETFs either liquidating or suspending all trading indefinitely.
Fixed Income: 10-Year Treasury yields sank as low as 1.72% during the week, reversing course after breaching 2% prior to the Russian invasion. Emerging Market bonds were down sharply for the week, -4.3% due to heightened exposure, both direct and indirect, to Russia. High yield corporate bonds were down -1.0% and high yield funds and ETFs had -$400m in withdrawals during the weekly period ended 3/2/22.
Commodities: Commodities across the board saw massive spikes during the week as the increasing isolation of Russia due to sanctions has removed a significant amount of supply from global commodity markets. Russia and Ukraine account for 14% of global wheat production and rank 1st and 5th, respectively. Wheat prices hit daily limit up levels on commodity markets as traders brace for shortages. Oil prices continued their surge above $100, hitting $114/barrel for US West Texas Intermediate. Natural gas prices doubled in Europe, hitting a new all-time high of $221 per MWh.
Please reach out to me if you have any questions or concerns. I’d be grateful to connect.
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Warmly,
Mark Sauer
info@AllOneWealth.com
+1(310)355-8286
