Market Update

Western governments have intensified sanctions against Russia, prompting numerous household brands to sever ties with the nation. John Lewis and Waitrose have halted the sale of Russian products, while tech giant Microsoft has frozen new sales in Russia. Retail leaders Nike and Ikea are shuttering their Russian outlets, BP is exiting its stake in the state-owned Rosneft, and Shell plans to leave joint ventures with Gazprom. In a symbolic move, Sainsbury’s has rebranded their Chicken Kiev dish to Chicken Kyiv, aligning with the Ukrainian spelling for the capital city.
A unified global front, comprising governments, businesses, and the general public, is emerging in solidarity with Ukraine, opposing Putin's unexpected aggressive stance. Notably, a significant portion of the Russian populace opposes this invasion. This was evident when over 4,300 Russians were detained during anti-war rallies across major cities, marking an unusual wave of dissent against Putin's regime.
Market dynamics this week were predominantly shaped by the evolving situation in Ukraine, resulting in heightened volatility. While historical data suggests that such market fluctuations are temporary, and we remain optimistic about the potential for robust, long-term equity performance, we acknowledge the current unsettling market climate.
Mid-week, markets experienced a brief respite when Jay Powell, the Federal Reserve Chairman, advocated for a moderate 0.25% hike in interest rates, defying economists' projections of a steeper 0.50% increase. Powell's statement ahead of the Federal Open Market Committee's upcoming meeting sets market expectations, akin to pre-emptively managing children's hopes for lavish Easter gifts.
Central banks are focused on countering inflation and are likely to adopt a measured approach to interest rate hikes. Additionally, they remain wary of the expanding sanctions on Russia. President Biden, for instance, is contemplating the ramifications of a US ban on Russian oil imports, exploring alternatives like easing embargos on Venezuela.
Wednesday's market uptick reflected the growing consensus for fewer interest rate hikes in the US, UK, and Eurozone. While market attention swiftly reverted to Ukraine, and despite a weekly downturn, the long-term prospects for equity markets appear positive given the revised interest rate projections.