D-PIMS Weekly Market Update - Week of 28th February to 6th March 2022
Today’s Monday update:
Over the course of last week, market moving headlines were mostly related to the invasion of Ukraine:
• On Monday, Russian forces seized two small cities in south-eastern Ukraine and the area around a nuclear power plant, the Interfax news agency said, but ran into stiff resistance elsewhere as Moscow's diplomatic and economic isolation deepened. After four days of fighting and a Russian advance that has gone more slowly than some expected, a Ukrainian delegation arrived at the border with Russian ally Belarus for ceasefire talks with Russian representatives, the Ukrainian presidency said. It was not clear whether any progress could be achieved.
• On Tuesday, more Western companies are pulled out of Russia, as corporations and investors across industries follow the lead of energy firms BP and Shell that abandoned multi-billion-dollar positions after the invasion of Ukraine. Leading banks, airlines, auto makers and more have cut shipments, ended partnerships and called Russia's actions unacceptable. Many more said they were considering action.
U.S. President Joe Biden assailed Russian President Vladimir Putin, barred Russian flights from American airspace and led Democratic and Republican lawmakers, in a rare display of unity on Tuesday in a State of the Union speech dominated by Russia’s invasion of Ukraine.
• Federal Reserve Chair Jerome Powell, balancing high U.S. inflation against the complex new risks of a European land war, said Wednesday the central bank would begin “carefully” raising interest rates at its upcoming March meeting, but be ready to move more aggressively if inflation does not cool as quickly as expected. Powell called the Russian invasion of Ukraine "a game changer" that could have unpredictable consequences. Powell said he will back a quarter point rate increase when the Fed meets 15th to 16th March, effectively putting to rest debate over starting a post-pandemic round of rate hikes with a larger than usual half-point increase.
• On Friday, Russian forces seized the largest nuclear power plant in Europe, after a building at the complex was set ablaze during intense fighting with Ukrainian defenders, Ukrainian authorities said. Fears of a potential nuclear disaster at the Zaporizhzhia plant had spread alarm across world capitals, before authorities said the fire in a building identified as a training centre, had been extinguished.
Russia's global financial isolation intensified on Friday as the London Stock Exchange suspended trading in its last Russian securities and some insurers withdrew cover from exporters over Moscow's invasion of Ukraine. Banks, investors and insurers have in recent days ratcheted up that pressure by exiting investments in Russia and halting the provision of their services.
• Over the week, the main Global Stockmarkets were down, particularly in Europe. Markets continued to be affected by the invasion of Ukraine and the effect on oil prices. Over the week, apart from the Low to Medium Risk Portfolio which was flat, the D-PIMS Portfolios were down, especially the higher risk portfolios. They were helped by their US and Absolute Return allocations.
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The comments made above represent our interpretation of events and market views and are in no way a guarantee of future investment performance.