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Gradient Investments Weekly Talking Points 03/14/2022
All data is for the week ended March 11, 2022
Stocks
The equities markets in the US were down, with the S&P 500 declining 2.84%, the Russell 2000 dropping 1.03% and the NASDAQ down 3.51%. Overseas, the developed markets (MSCI EAFE) increased 0.57% while the emerging markets (MSCI EM) dropped 5.07%.
Within the US, the best performing sectors wereenergy and utilities while consumer staples and technology were the biggest laggards. By style, value outperformed growth and small caps outperformed large caps1.
Fixed Income
Interest rates rose and bond values fell, with the yields on 2-year, 10-year and 30-year treasuries rising by 25 basis points, 26 basis points and 20 basis points, respectively. That resulted in a 2.00% rate for 10-years, which is down from 2.64% at this time in 2019.1
Commodities
The price of West Texas crude fell 5.49% last week to $109.33 per barrel.2 One of the largest suppliers in OPEC, the UAE, said that it favors productions increases and will be encouraging OPEC to consider higher production levels. This comes as Ukraine’s president said he’s prepared for certain compromises with Russia, which could result in more Russian oil available to the West.3
Economic Data
Inflation- the Consumer Price Index (CPI) rose 7.9% on a year-over year basis. Core CPI – which excludes volatile food and energy items—rose 6.4% year-over-year. Fuel oil and Used cars & trucks led the increases with 43.6% and 41.2% price hikes over the last year.4
The consumer sentiment index fell to 59.7 in the early weeks of March, its lowest level since 2011 and a nearly 3 point decline from February’s final reading. The survey is heavily influenced by recent trends in the stock markets together with high fuel prices, rising interest rates and the crisis in Ukraine.5
Company News6
G40i holdings Iberdrola SA (IBDRY), a utility based in Spain, Allianz SE (ALIZY) and Munich Re (MURGY), insurance companies based in Germany, rose 8.88%, 6.94% and 6.93%, respectively last week. Gains can be attributed to a general alleviation of fear around western Europe as the prospects improved for a truce in Ukraine.
Travel & Leisure Co. (TNL), a Core Select and Contrarian Choice holding, rose 4.43% last week following the board’s announcement of another increase to their dividend, bringing the total increase to 33% over the past year. The increase is attributed to the strength management is seeing in their travel business.7
Did you know…
Every “c’ in Pacific Ocean is pronounced differently.
Mariann Montagne, CFA
Portfolio Manager
Sources:
1 JP Morgan Weekly Market Recap 3-14-22
3 Oilprice.com, “Oil Prices Crash” 3-9-22
4 Bureau of Labor Statistics 3-10-22
5 Reuters, “US Consumer Sentiment Near 11-year Low” 3-11-22
6 All weekly changes in company stock prices: Yahoo Finance
7 Travel + Leisure Co. press release 3-2-22
Advisory services are offered through American Retirement Advisors, Inc., a Registered Investment Advisor in the State of Michigan. Insurance products and services are offered through American Retirement Solutions an affiliated company. American Retirement Advisors, Inc. and American Retirement Solutions are not affiliated with or endorsed by the Social Security Administration or any government agency. The information contained herein should in no way be construed or interpreted as a solicitation to sell or offer to sell advisory services to any residents of any State other than the State of Michigan or where otherwise legally permitted. All written content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Moreover, this material has been derived from sources believed to be reliable, but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed.