Still weakened by the Ukrainian situation and the flurry of sanctions against Russia, financial markets have lost ground this week. In addition, the Fed dampened the mood with hawkish comments from several officials. Persistent inflationary pressures are leading to an acceleration in the normalization of monetary policy. The prospect of balance sheet deleveraging and more aggressive monetary tightening have pushed investors to further sell off, while they await the release of quarterly earnings next week.
Weekly variations*
34721.12  -0.28%
14327.26  -3.59%
Chart NASDAQ 100
FTSE 100
7669.56  +1.75%
Chart FTSE 100
1945.70$  +1.09%
Chart GOLD
97.78$  -0.56%
Chart WTI
1.09$  -1.53%
This week's gainers and losers
  • Twitter (+22%): Elon Musk has acquired 9.2% of the capital of his favorite social network, which he accused a few days before of not caring enough about freedom of expression. The Tesla boss will have the opportunity to make his point of view known, as he will join the board of directors.
  • HP Inc (+12%): Berkshire Hathaway, Warren Buffett's holding company, has invested $4.2 billion in the IT group. This news is logically beneficial for the company, which gained 14% on Thursday alone. 
  • 888 Holdings: The stock soared 23.6% after the gambling company and U.S.-based Caesars Entertainment wrote down the transaction value of William Hill's non-U.S. assets, citing difficult economic conditions and regulatory investigations.
  • Starbucks (-9%): Back at the helm, Howard Schultz started by stopping share buybacks to "invest in coffee shops and employees". These social aspirations are not so much to the taste of the stock market. 
  • Affirm Holdings (-17%): Several analyst comments weighed on the stock this week. Piper Sandler reduced its price target from USD 65 to USD 58 per share while remaining neutral. MoffettNathanson downgraded its buy rating to neutral.
  • JetBlue (-18%): The airline has outbid Frontier Group's proposal to buy Spirit Airlines. The latter will discuss with the new suitor, which offers $3.6 billion against $2.9 billion to its rival. The market is skeptical because the price is high and the synergies between the two carriers are not obvious.
Chart Commodities
Oil prices recorded another week of decline, bringing prices to around USD 100 per barrel for the Brent. Members of the International Energy Agency (EIA) will release 60 million barrels from their stocks, which seems to be bearing fruit. Remember that the United States has pledged to draw on its reserves the equivalent of one million barrels per day for six months, a total of 180 million barrels, an effort to curb rising energy prices and offset the decline in Russian oil supplies. At the same time, traders are keeping a close eye on the progress of containment measures in China, which is synonymous with compressed oil demand.

Despite inventories struggling to recover and supply still depressed by high energy prices in Europe and further disruptions in China, industrial metals prices have lost some height this week. Zinc, which recently hit a 15-year high, is trading at USD 4,250. Copper and aluminum are trading at $10290 and $3345 respectively. On the precious metals side, there is not much to report, as the price of an ounce of gold has stalled. The price of the barbaric relic moved narrowly between USD 1920 and USD 1940.

In agricultural commodities, the European Commission expects wheat production in the European Union to increase by 1.5%. While this increase seems modest, exports are expected to jump by more than 20% year-on-year. This is the result of high prices, but especially the decline in Russian and Ukrainian supply on world markets. In Chicago, wheat is trading around 1020 cents per bushel.
Chart Commodities
The fed sought this week to prepare investors for an aggressive policy against rising prices. It was about time, according to the market, which is still not reassured. Will the Fed be able to reduce its forced support measures without shattering the economic momentum? That is the multi-billion dollar question of the moment. 

The central bank's aggressive stance, confirmed by the minutes of the last meeting in March, has caused bond yields to rise. The US debt is paying 2.71% on 10 years. For the record, this rate was 2.15% two weeks ago, and 1.97% a month ago. Yields on long and medium term maturities are intermingled, a sign of some confusion among investors.

In the foreign exchange market, the euro lost 2% on the week against the dollar at USD 1.0895. The Fed is much more hawkish than the ECB at the moment. But the biggest slide of the week was against the greenback, which gave back 10% to the ruble, at RUB 76.50 to USD 1. Half of the low recorded a month ago, at RUB  154 for USD 1... And a parity that returns to its pre-war levels in Ukraine. 

The joy was ultimately short-lived for crypto-investors. Still tied to the Nasdaq, bitcoin is closely following the signs of nervousness in the US index but, obviously, with larger swings. After rising close to $48,000 at the start of the week, the digital currency has shed more than 8% and its price is now hovering around $43,000 at the time of writing. 

Next week, important economic events will return, including US inflation in March (Tuesday 12), the ECB's decision on monetary policy and US retail sales in March (Thursday 14).
Historical Chart
A difficult choice
Traders are in a state of uncertainty. They no longer know whether to listen to Jerome Powell, who is warning about the consequences of inflation, or to Warren Buffett, who is back to shopping. The oracle of Omaha has indeed become this week the first shareholder of HP, a technology company born of the 2015 split of Hewlett-Packard, with 11% of the group's shares. The American investor had already bought Alleghany Corporation, an insurance company, at the end of March for 11.6 billion dollars. He seems to be rather in a buying mood at the moment, while a gentle wind of panic is gradually taking hold of stock markets. On the other hand, more and more stock market strategists are predicting a recessionary shock against the backdrop of tightening central bank monetary policy and rising inflation. What's next for equity markets? No one really knows. In the meantime, as long as real rates (after inflation) remain well below equity market yields, the panic should be contained.
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*The weekly movements of indexes and stocks displayed on the dashboard are related to the period ranging from the open on Monday to the sending time of this newsletter on Friday.
The weekly movements of commodities, precious metals and currencies displayed on the dashboard are related to a 7-day rolling period from Friday to Friday, until the sending time of this newsletter. These assets continue to quote on weekends.