Weekly Market View from Realm Investment Management. Week ending 28th January 2022.
Intra-day on Monday the VIX measurement of market volatility rose above 38 for the first time since October 2020, reflecting the sharp ratcheting higher of investor fear over the situation in Ukraine. U.S. family members were ordered to leave its Kyiv embassy “due to the continued threat of Russian military action”. Should there be a Russian invasion of Ukraine, President Biden said he would consider imposing personal sanctions on Vladimir Putin.
Adding to the market’s early-in-the-week “risk-off” mood was the anticipation of the two-day Fed meeting which finished on Wednesday. Chairman Jerome Powell said the Fed was “of mind to raise rates at the March meeting” to cool down inflation. In fact many on Wall Street, including Goldman Sachs, are now expecting five rate increases this year.
Despite the high level of investor concern as described above, markets recovered and even managed a higher close for the week in the U.S. due to a strong rally late on Friday.
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