Volatility spiked last week on the back of the tragic events taking place in Ukraine. While the huge intra- day market reversal on Thursday led some market participants to think it is now time to “Buy on the sound of cannons”, we believe that the war in Ukraine does not signal a market regime change. On the contrary, it may actually reinforce some of the key market and macro trends which have been in place over the last few months. Below, we highlight five key trends and highlight their impact on our current investment strategy.  

The major US equity indexes closed mostly higher after a week of historic volatility sparked by Russia’s invasion of Ukraine.

The fact that Russian tanks are entering the streets of Donetsk means that there is a risk of escalation and that things could easily spiral out of control.

US equity large-cap indexes suffered their 2nd consecutive week of declines as high inflation and worries over a Russian invasion of Ukraine weighed on sentiment.

Below are answers to our Client’s most frequently asked questions (FAQs) on inflation, the Fed, FOMC minutes, Russia/Ukraine, our portfolio positioning and Gold as a hedge. 

It was another volatile week for risk assets. US large-cap equity indexes ended the week lower with the Nasdaq faring worse. Healthy earnings growth was offset by fears over monetary tightening.

Equity markets remained volatile but recorded overall gains for the second consecutive week. It was one of the busiest weeks of the Q4 earnings reporting season, with 112 companies in the S&P 500 Index scheduled to report results.

Late gains helped the US main stock benchmarks to close in positive territory for the week after they briefly hit correction territory (down more than 10% from recent highs). The small-cap Russell 2000 Index lagged and ended the week down nearly 20% from its November peak, leaving it just outside of a bear market.

Facing both surging inflation and volatile financial markets, the Federal Reserve on Wednesday said it could soon raise interest rates for the first time in more than three years, as they are normalizing their monetary policy.

Please find below answers to our Client’s most FAQs (frequently asked questions) on current market turmoil, our portfolio positioning, upcoming Fed meeting and Russia / Ukraine risk.