Weekly Market Update - 16 May 2022

Fading Hopes For A Soft Landing Punish Stocks

Stocks recorded another week of losses, as investors appeared to grow increasingly skeptical that the Federal Reserve will be able to achieve a “soft landing” for the economy by raising rates enough to tame inflation without causing a recession. The Cboe Volatility Index (VIX) remained elevated but slightly below its recent intraday high on May 2. Many cryptocurrencies plunged in value, further suggesting a strong risk-off environment.

It marked the sixth consecutive weekly decline for both the S&P 500 Index and the Nasdaq Composite and the seventh for the Dow Jones Industrial Average—the longest stretch for the latter since 2001, according to The Wall Street Journal.

Finland Poised To Decide On Joining NATO; Russia Threatens Retaliation

Finland’s President Sauli Niinistö and Prime Minister Sanna Marin backed the country joining NATO as soon as possible. Finland is expected to formally announce its decision on Sunday. Sweden indicated it would announce a similar decision on the same day. The Russia foreign ministry threatened unspecified “military-technical” retaliation. Previously, Russian officials have warned that they might place nuclear weapons in the Kaliningrad enclave on the Baltic coast.

EU Energy Companies, Cuts Off Gas

Russia imposed sanctions on European Union (EU) energy companies, including Gazprom Germania, which was taken over by Germany last month. Russia’s state-owned gas company Gazprom then said it would cut shipments to Europe via the Yamal pipeline, which runs through Poland to Germany. Earlier, Ukraine’s pipeline operator stopped flows through one of the two pipelines transporting Russian gas through the country to Europe, blaming interference by Russian armed forces.