- US stocks were up by 1.61% while international stocks were flat. Bonds got hit hard, declining by 1.85% as the yield on the 2 and the 10-year treasury bonds were up by 33 and 34 basis points, respectively, for the week. Crude oil shot higher by 10.49%.
- The recent equity rally is being helped by higher interest rates pushing down the price of bonds, and cash getting murdered by inflation, moving investors back into equities.
- The aggregate bond index is down by 6.8% year-to-date as yields continue to soar and markets price in more tightening and higher rates down the road. Investors are now anticipating half point hikes at the next two Fed meetings in May and June.
- There are small signs that labor participation is beginning to pick up, rising by 0.4% in the three months ending 2/28/22. 1.87 million people went back into the work force which was 3x the rate from the prior three months. There are also indications that the “quit” rate is slowing down.
- Higher inflation and interest rates will slowdown economic growth, with the offset being fading worries about Covid. How that mix all plays out will determine where the economy goes from here.
- The brutal Russian invasion of Ukraine continues.