The situation in Ukraine continued to take center stage last week, crowding out most other financial news. US President Joe Biden, citing US intelligence agency information, stated that he believes Russia will attack Ukraine in the coming days.
Weekly Investment Updates
Two all-too-familiar stories dominated the financial news cycle last week: inflation and the situation in Ukraine.
Standing in stark contrast to the message of unity associated with the ongoing Winter Olympics, tensions in eastern Europe continue to rise as Russia has amassed more than 100,000 troops, along with tanks and artillery, near the border of Ukraine.
Risk assets, in general, fell again last week as concerns over inflation, Federal Reserve rate hikes, the omicron variant, and geopolitical tension weighed on investors.
A new year is underway, and it started off in a relatively inauspicious way for market participants. First the positive news – the US unemployment rate fell to below four percent in December and employee wages grew, as well.
As we approach the beginning of a new year, it is only natural to reflect upon the year that was to remind ourselves how we arrived at this moment.
The past week was filled with both ups and downs for risk assets, as markets struggled to digest news related to the Covid-19 omicron variant, surging inflation, and the latest Federal Reserve (Fed) messaging.
Inflation was once again a headline last week as the US Consumer Price Index (CPI) released its most recent reading. The November CPI report stated that inflation increased 6.8% year-over-year, marking the highest advance in 39 years, slightly higher than October’s 6.2% print.
The Friday following Thanksgiving, typically a quiet day in equity markets, was anything but quiet this year as news of a significantly mutated COVID-19 variant discovered in South Africa led to a “sell first ask questions later” trading day. The S&P 500 index declined 2.3%, but many “reopening” stocks like airlines and cruise lines declined 10% or more.
Electric vehicles, also referred to as “EVs”, are getting renewed interest from both consumers and investors after Rivian stock skyrocketed after going public with the sixth largest initial public offering in US history. The EV market, which has been dominated by Tesla for the past decade, is getting more crowded by the day as newer companies such as Rivian, Lucid, Lordstown, and Nikola join larger established automotive companies like Ford, General Motors, and Toyota in launching new options.