In this week’s recap: Inflation and Ukraine rattle investors another week.
THE WEEK ON WALL STREET
Stocks closed lower for the week as escalating tensions on the Russian-Ukrainian border added to existing jitters over higher inflation and a pending tightening of monetary policy.
The Dow Jones Industrial Average slid 1.90%, while the Standard & Poor’s 500 declined 1.58%. The Nasdaq Composite index lost 1.76% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, fell 1.00%.1,2,3
GEOPOLITICAL TENSIONS
Markets have been skittish in recent weeks due to persistent, elevated inflation and the uncertainty over how aggressive the Federal Reserve may be with its monetary tightening. As tensions escalated between Russia and the West over a possible Russian invasion of Ukraine, investors moved away from risk assets, such as stocks, and sought the safety of U.S. Treasury bonds.
Stocks were hard hit on Thursday as reports surfaced that both sides were exchanging artillery fire. The slide continued on Friday as prospects of a diplomatic offramp appeared to dim. While geopolitical news dominated trading last week, investors were relieved by the Federal Open Market Committee meeting minutes (released on Wednesday) that suggested the Fed may not act any more aggressively than current market expectations.4
AN EARLY ECONOMIC SNAPSHOT
Last week three economic reports provided an update on the state of the economy. The first was the Producer Price Index, which suggested that inflationary pressures remain acute. Wholesale prices rose 1.0% last month and posted a 12-month rise of 9.7%, the latter of which was near a record high.4
The consumer showed continued strength as retail sales rose a better-than-expected 3.8%, though some of that gain may be due to higher costs. Meanwhile, industrial production gained 1.4%, nearly triple the consensus expectation. Capacity utilization increased 1.0 percent, reaching its highest level since March 2019.5
TIP OF THE WEEK
Some companies match employee retirement plan contributions. If your budget allows, contribute enough to qualify for the match.
THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: Purchasing Managers’ Index (PMI) Flash. Consumer Confidence.
Thursday: Gross Domestic Product (GDP). Jobless Claims. New Home Sales.
Friday: Consumer Sentiment. Durable Goods Orders.
Source: Econoday, February 18, 2022
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision
THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Tuesday: The Home Depot, Inc. (HD), Palo Alto Networks, Inc. (PANW), Agilent Technologies, Inc. (A).
Wednesday: Lowe’s Companies, Inc. (LOW), The TJX Companies, Inc. (TJX), eBay, Inc. (EBAY), Booking Holdings, Inc. (BKNG).
Thursday: Block, Inc. (SQ), Dell Technologies, Inc. (DELL), VMware, Inc. (VMW), Ingersoll Rand, Inc. (IR), AnheuserBusch InBev (BUD).
Friday: Berkshire Hathaway, Inc. (BRK.B), EOG Resources, Inc. (EOG).
Source: Zacks, February 18, 2022
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
QUOTE OF THE WEEK
“Life is either a daring adventure, or nothing.” HELEN KELLER
THE WEEKLY RIDDLE
You go in through one hole, you come out through three holes. Once you’re inside you’re ready to go outside, but once you’re outside you’re still inside. What is it?
LAST WEEK’S RIDDLE:
What is the smallest number of cars that can be driven down the road in this formation: two cars ahead of a car, two cars behind a car, and a car between two cars?
ANSWER:
Three cars. One car in front, one in the middle, and one behind.
Greg R. Solis, AIF®
President and CEO
Bob Medler, CRPC®, CMFC®, AIF®
Wealth Advisor / Investment Analyst
Tiffany Valentine, CFP®
CERTIFIED FINANCIAL PLANNER™
Vice President | Director of Financial Planning
SOLIS WEALTH MANAGEMENT
78-075 Main Street
Suite 204
La Quinta, CA 92253
Office: (760) 771-3339
Fax: (760) 771-3181
www.soliswealth.com
E-Mail: greg@soliswealth.com
E-Mail: bob@soliswealth.com
E-Mail: tiffany@soliswealth.com
CA Insurance License #0795867, 0C05523 & 0D73175
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested.
This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such.
All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results.
MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.
Copyright 2022 FMG Suite.
CITATIONS:
1. The Wall Street Journal, February 18, 2022
2. The Wall Street Journal, February 18, 2022
3. The Wall Street Journal, February 18, 2022
4. CNBC, February 15, 2022