Conflict in Ukraine Continues to Drive Inflation | Pathstone

Market Flash Report - April 2022

US Equities plummeted amidst the Fed rate hike, the war in Ukraine, and a contraction of Real GDP. The S&P 500 fell nearly 9% while the Nasdaq 100 had its worst month since 2008. US Oil prices have been temporarily stabilized with the release of oil from the Strategic Petroleum Reserve. Personal Consumption Expenditures rose by 6.4% YoY, the fastest pace of inflation since 1982. Value equities held up better than Growth equities through this month and year and fixed income returns continued to tumble in April as the market adjusted to expected rate hikes.

Key Takeaways

  • Given a month to process the first Fed rate hike, the war in Ukraine, and now a surprise contraction of Real GDP in Q1, U.S. equities plummeted. The S&P 500 fell nearly 9% while the Nasdaq 100 had its worst month since 2008.
  • The Biden Administration approved the release of emergency oil from the Strategic Petroleum Reserve, temporarily stabilizing oil prices in the U.S.
  • Personal Consumption Expenditures (“PCE”), the Federal Reserve’s preferred inflation measure, rose by 6.4% YoY, the fastest pace of inflation since 1982. If food and fuel prices are stripped out, Core PCE climbed by 5.2% in the year.
  • Value equities held up better than Growth equities through this month and year.
  • Fixed income returns continued to tumble in April as the market adjusted to expected rate hikes and balance sheet reduction and as the Fed battles persistent inflation.
index performance as of 04-29-22 - ukraine

You cannot invest directly in an index; therefore, performance returns do not reflect any management fees. Returns of the indices include the reinvestment of all dividends and income, as reported by the commercial databases involved. Returns over one year have been annualized.

Source — Bloomberg, Morningstar, treasury.gov. S&P Dow Jones Indices.

Please see PDF for important disclosures.

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