Market Notebook

by | Mar 6, 2022

Discussion – 

Equities, as measured by the ticker SPY, closed slightly lower last week while bonds, as measured by the ticker BND closed higher.

Equity prices appeared to remain in consolidation near the bottom of a consolidation range, while Bonds appeared to be trading in a recently created consolidation range.

Recent equity price action is concerning in that it appears prices are struggling to hold near-term support. It is likely not a time for aggressive purchases generally. Technology and growth stocks have had a tough time recently, and there is a potential opportunity once the overall situation in the equity market improves.

Although bond prices have halted their slide and have created an area of price consolidation, significant inflation concerns associated with possible sanctions on the Russian oil industry may not be priced in. Should such sanctions occur, sharp increases in the price of oil appear likely in the short term, with possible overall inflationary effects over the medium to long term. The economic actions by governments across the world have created an unprecedented economic situation and thus, the outcomes are hard to predict.

For those holding a well-constructed and balanced portfolio, now is likely a time to remain vigilant and on the defensive. It is likely prudent to hold tight, sit on one’s hands, and see how the situation develops.

All the best.