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Weekly Economic Update: March 8th, 2022

March 8th, 2022

Weekly Market Update

In this week’s recap: Ukrainian War places new stress on the economy.

The Week on Wall Street

War in Ukraine weighed on stocks as investors assessed the economic impact of continued hostilities, expanding economic sanctions, and potentially higher inflation due to rising oil prices and new stresses on the global supply chain.

The Dow Jones Industrial Average fell 1.30%, while the Standard & Poor’s 500 lost 1.27%. The Nasdaq Composite index slid 2.78% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, dropped 3.21%.^1,2,3

Another Volatile Week

The uncertainty introduced from Russia’s invasion continued to whipsaw the financial markets last week. Intensifying hostilities early in the week sent stocks sharply lower as oil prices surged and a flight to safety drove investors to buy bonds.

Stocks rebounded mid-week following the release of positive economic data and Congressional testimony by Fed Chair Jerome Powell, who said the Fed is likely to move forward on rate hikes but would proceed cautiously. Investor enthusiasm was short-lived, however, as stocks resumed their decline on Thursday into Friday despite a strong employment report.

Powell Testifies

Fed Chair Powell told Congress on Wednesday that he would propose a 25-basis point increase in the federal funds rate when the Federal Open Market Committee meets in mid-March. He conceded that the invasion of Ukraine and the economic sanctions against Russia introduced a level of uncertainty and that the Fed would proceed carefully with monetary tightening.

Powell also testified that he would not have the Fed’s strategy to shrink its balance sheet finalized before the mid-March meeting. Alluding to the urgency of fighting inflation, Powell left the door open to more aggressive rate hikes later in the year.⁴

Tip of the Week

Applying for a mortgage online could save you some money in terms of closing costs, origination fees, and interest rates as the online application cost is less for the lender to bear.

Radio

Be sure to tune in every Saturday to Retire Ready with David Nicholas on 95.5 FM WSB at 7 pm!

Media

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[yotuwp type="videos" id="j2l9AOIB4zE" ]

Russia and Ukraine account for 30% of the world's wheat exports. Wheat prices have surged 30% in the past week. David Nicholas joined Neil Cavuto on Fox Business on Friday, 3/4 to discuss how Vladimir Putin's war could lead to the largest disruption of wheat exports in history.

[yotuwp type="videos" id="OJvtYR-liHY" ]

Inflation, record gas prices, and Russia brought the market to where it is today. Key technical levels will now drive the market in the short-term future. Watch David Nicholas' conversation with Stuart Varney on Fox Business Tuesday, 3/8 to see if a recession could happen this year.

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