Weekly Brief Sheet - 21/03/22

Provides a market round up, a selection of useful data points we use for our investment analysis, and some interesting articles/charts we have noticed recently.

Asset Price Movements
Stocks moved higher for the week, ending a two-week losing streak and reclaiming much of the ground lost over the past month.

While fighting continued in Ukraine, investor sentiment was also buoyed during the week by continued negotiations to end the conflict. Gains were widespread across the major indexes, with the tech-heavy Nasdaq Composite staging the biggest rally.

As expected, the Fed raised its short-term lending rate by 25 basis points (a quarter percentage point) at its March meeting, moving the fed funds target rate from near zero to a range of 0.25% to 0.50%. It was the first rate hike by the Fed since 2018 and marked a key step away from the ultra-accommodative monetary policy the central bank instituted in the early days of the pandemic. Policymakers also released an updated economic forecast, which showed they are expecting to raise rates seven times in 2022, according to the median projection. In addition, they downgraded their forecast for economic growth, while upwardly revising inflation projections.

Shares in Europe gained ground for a second consecutive week amid cautious optimism that negotiations between Russia and Ukraine could yield a peace plan. China’s announcement that it would take measures to support the economy and financial markets also appeared to boost sentiment. In local-currency terms, the pan-European STOXX Europe 600 Index advanced 5.43%. Germany’s Xetra DAX Index added 5.76%, France’s CAC 40 Index tacked on 5.75%, and Italy’s FTSE MIB Index climbed 5.13%. The UK’s FTSE 100 Index gained 5.13%.

In a speech to the annual “The ECB and Its Watchers” conference, European Central Bank President Christine Lagarde appeared to strike a more bearish tone since last week’s policy meeting. She warned that the Ukraine conflict could trigger “new inflationary trends,” as inflation expectations become embedded, companies onshore supply chains, and countries switch to different sources for energy supplies.

In Australia, the government promised the biggest overhaul of the nation’s payment systems since the early days of the internet.

A taxation system for cryptocurrency, protections for investors from unscrupulous dealers and methods of regulating digital banks, crypto exchanges and brokers are all on the table under the proposed changes.
“The government can’t guarantee your crypto any more than it can guarantee a painting or a share in a company, and nor should it,” Financial Services Minister Jane Hume said on Sunday.

“But we can make sure Australian exchanges, custodians and brokers – Australian players in the crypto ecosystem – work within a regulatory framework that is better, safer and more secure.”
Treasurer Josh Frydenberg flagged the reforms in December, announcing that the Morrison government would look to make the biggest changes to the sector in 25 years.

Links:
How a Ukrainian Economist Is Fighting the Russians
 

Sectors & Stocks:



Bonds & Fixed Income:



Commodities:



 

DISCLAIMER: This report has been prepared by H&G Investment Management Ltd (ACN 125 580 305; AFSL 317155) to provide you with general information only. In preparing this report, we did not take into account the investment objectives, financial situation or particular needs of any particular person. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Neither H&G Investment Management Ltd nor its related parties, their employees or directors, provide any warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it. You should obtain a copy of the Information Memorandum before making a decision about whether to invest in this product.