Insights

Sign up to receive exclusive financial insights:

Close

Weekly Updates

CPI, Russia – Ukraine Tensions, Fed Rate Hikes, Weigh on Investors

Weekly Update – February 11, 2022

  • The S&P 500 index fell 1.8% last week on rising US consumer costs and as tensions between Russia and Ukraine escalated.
  • The market benchmark ended the week at 4,418.64, down from last week’s closing level of 4,500.53. The index is now down 2.1% to date in February and has fallen 7.3% so far this year.
  • The index posted gains on Tuesday and Wednesday as some better-than-expected quarterly earnings reports continued to come in and a decline in COVID-19 cases across the US prompted officials to relax some restrictions.
  • Thursday, however, the US Bureau of Labor Statistics reported the US consumer price index for January reached its highest level since February 1982. The reading, which showed consumer price inflation rose to a 7.5% annual rate in January, was higher than expected and compared with a 7% rate in December.
  • The data prompted questions over the potential size of the boost to interest rates that is expected next month from the Federal Reserve’s Federal Open Market Committee.
  • On Friday, the US State Department urged Americans to leave Ukraine and “exercise increased caution due to crime, civil unrest, and potential combat operations should Russia take military action.” That alert sent the index down 1.9% for the day, which also pushed it into the red for the week.
  • By sector, the communication services sector had the largest percentage drop of the week, down 3.9%, followed by a decline of 2.9% in technology, a slip of 2.8% in real estate and declines of 2.3% each in utilities and consumer discretionary. Other sectors in the red included health care, consumer staples, industrials and financials.
  • Just two sectors ended the week in positive territory: Energy climbed 1.7% while materials gained 1.1%.
  • In communication services, shares of Lumen (LUMN) tumbled 19% for the week as the technology and communications company reported Q4 adjusted EPS and revenue below analysts’ expectations. The company also forecast 2022 adjusted earnings before interest, taxes, depreciation and amortization below the Street view.
  • The technology sector’s decliners included Zebra Technologies (ZBRA), whose shares fell 12%. The enterprise mobile computing company reported Q4 adjusted earnings per share and revenue above year-earlier results and analysts’ mean estimates, but forecast Q1 adjusted EPS below Street expectations.
  • The energy sector’s advance came as crude oil futures rose on the tensions between Russia and Ukraine. Among the gainers, shares of Valero Energy (VLO) added 6.1% on the week while Baker Hughes (BKR) climbed 9.6%.
  • The materials sector’s gainers included shares of Albemarle (ALB), which rose 6.9% on the week as the chemical manufacturer said it has signed a non-binding letter agreement with Mineral Resources to explore a potential expansion of their MARBL lithium joint venture.
  • Next week, the companies expected to release financial results include Avis Budget Group (CAR), Marriott International (MAR), Airbnb (ABNB), Roblox (RBLX), Hyatt Hotels (H), Cisco Systems (CSCO), Walmart (WMT) and Deere (DE).
  • Economic data expected next week include the January producer price index on Tuesday, January retail sales, industrial production and capacity utilization on Wednesday, January building permits and housing starts on Thursday and January existing home sales and leading economic indicators on Friday.
  Back to Insights Page