All data is for the week ended March 18, 2022
Stocks
Markets were higher around the world, with the S&P 500 gaining 6.19%, the Russell 2000 adding 5.43% and the NASDAQ rising 8.20%. International developed markets (MSCI EAFE) increased 5.63% while emerging markets (MSCI EEM) rose 3.51%. Growth outperformed value stocks. By sector in the US, consumer discretionary and tech were the leaders while energy and utilities were the laggards.1
Fixed Income
The Federal Reserve, as expected, raised the Fed funds rate by 0.25% from near zero to between 0.25% and 0.50%.2 It was the first increase by the Fed since 2018, and the central bank predicted it could rise to 1.90% by yearend and 2.80% by the end of 2024. Russia’s invasion of Ukraine is adding to uncertainty around the outlook, which will likely boost inflation – from their previous estimate of 2.6% to 4.3% – and dampen economic growth this year – from the 3.6%-4.5% range to the 2.5-3.0% range.3
Commodities
With the war in Ukraine, the price of wheat has increased dramatically in the past month. Russia and Ukraine together supply about 26% of the world’s wheat exports, and shipments have already been disrupted. The contracted price of wheat for May delivery jumped 54% in just nine trading days starting Feb. 23 from $8.84 to $13.63 per bushel before coming back below $11 per bushel.4
Economic Data
Wholesale prices rose a sharp 0.8% in February from January, the largest increase in 40 years. On a year over year basis, wholesale prices were up 10.0%. Core wholesale prices (which excludes food, energy, and retail) were up 6.6% year over year; this is viewed by the Federal Reserve as a better indicator of inflation.5
Company News6
DocuSign Inc. (DOCU), a Contrarian Choice, Core Select and G33 holding, rose 27.33% last week. This was a sharp rebound following management’s report of strong revenue and earnings growth in the previous week combined with guidance that was below the consensus estimate.7 Last week the CEO bought $5 million worth of company shares,8 which increased investor confidence.
GI holdings in the technology software subsector including PayPal Inc. (PYPL), Snap Inc. (SNAP) and Sprout Social Inc. (SPT) advanced 19.80-26.15% as the group rebounded from a period of decline due to valuation compression.
Did you know…
The famous Las Vegas Strip is not actually in the city of Las Vegas. It sits immediately south of the city and is located in the unincorporated towns of Paradise and Winchester, Nevada. That’s why gaming data for the area is reported by Clark County, not the city of Las Vegas.
Mariann Montagne, CFA
Portfolio Manager
Sources:
1 JP Morgan Weekly Market Recap 3-21-21
2 Federal Reserve press release 3-16-22
3 Federal Reserve Projection Materials 3-16-22
4 Reuters, “Wheat Prices Soar on Ukraine Fears” 3-21-22
5 Bureau of Labor Statistics 3-15-22
6 All weekly changes in company stock prices: Yahoo Finance
7 DocuSign press release 3-10-22
8 Securities & Exchange Commission filing 3-15-22, Securities & Exchange Commission filing (#2) 3-15-22