All eyes are on Ukraine and the political crisis that is far from being resolved : this has been putting a cap on forward momentum and investors are advised to remain extremely vigilant as any escalation can potentially create volatile shock waves.
Equities
For right now, the story on Wall Street is the bull market rolls on : the benchmark S&P 500 closed at another record high of 1,877 points as traders are pushing the index towards the 1,900 level. Interestingly, on this day in 2009, the S&P hit an intra-day bottom of 666 points following the prior year’s global financial meltdown. The Dow Jones Industrial Average, which has been the laggard so far this year, closed up 56 points and is now inside 200 points of breaking its own closing record, while the NASDAQ composite index had a muted performance, down 6 points.
Of course, the greatest concern amongst the global investment community is the Ukrainian crisis, specifically the outcome from the standoff between Russia and the Western allies : while strong rhetoric has been exchanged across the entire spectrum, it’s not clear whether any side can gain an advantage. Russia provides 30% of the European Union’s natural gas needs, while a critical supply route that is used by U.S. troops in Afghanistan runs through Russian territory. On the other hand, Russia’s MICEX is down about 6-and-a-half percent for the week and a recent poll suggested that 73% of Russians were against involvement in Ukrainian affairs.
Currencies – No Currencies this week
Winners & Losers
The winner for this week is Midstates Petroleum, ticker symbol MPO :
- Shares jumped over 14% on Wednesday due to a delayed earnings report to account for “positive developments around improved financial flexibility.”
- The company is attempting to restructure its liabilities as it is saddled with an extremely high debt to equity ratio of 2.45. Despite the recent swing in bullish enthusiasm, Wall Street analysts’ consensus is very poor so MPO remains a speculative investment.
The loser for this week is Sberbank Russia, ticker symbol SBRCY :
- Shares dropped -11.5% on Monday following Russian forces’ incursion into Crimea, setting off global market volatility.
- The Russian ruble dipped to multi-year lows against the U.S. dollar early this week and while a recovery is underway, the long-term picture is still very much bearish and any further incidents could devastate the Russian equities sector.
Precious Metals
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Gold
Gold had a strong opening week performance as investors scrambled to safe haven assets, but trimmed back a majority of those gains by mid-week. However, Thursday’s market action propped up the metals complex, with gold closing at $1,351.
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Silver
Silver, in contrast, had a relatively slow opening performance as investor sentiment for industrial metals, including copper, began to decline at the end of February. But with the U.S. fast-tracking sanctions against Russia, investor sentiment lifted silver’s price to $21.46.
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Palladium
Palladium had its strongest week of the year, with prices pushed north of $770. Of course, much of this is attributed to speculation on supply concerns as Russia is the leader in palladium production. Thursday’s market action closed at lucky number 777.