Brian Jacobsen provides perspective on the Russia-Ukraine war and other key topics of the current week—plus, his thoughts about what the week ahead may hold. Here’s his report for the week of April 23–29, 2022. Plus: There’s a recap of April’s key events.

The week that was

Russia-Ukraine update:

  • Actions:
    • U.S. Secretary of State Blinken and Defense Secretary Austin visited Ukraine’s President Zelensky in Kyiv. The U.S. pledged more military financing for Ukraine and said U.S. diplomats would return to Kyiv.
    • Russia continued to attack the Azovstal steel plant in Mariupol where Ukrainian fighters are holding out.
    • Russia has continued to focus its attacks on the east and south of Ukraine, though it is still attacking rail and fuel installations deep inside Ukraine. Russia killed eight Ukrainian civilians by firing missiles on the port city of Odessa on Sunday, Orthodox Easter.
    • Finland and Sweden are preparing to apply for membership in NATO by mid-May.
    • President Biden is requesting Congress to approve $33 billion in extra aid for Ukraine.
    • Russia fired missiles into Kyiv while the U.N. Secretary General was visiting the city.
  • Sanctions:
    • Russia halted gas deliveries to Poland and Bulgaria. The European Commission continues to recommend that companies not comply with Russia’s demand that natural gas payments be made in rubles. Natural gas prices shot higher on the news.
    • Germany is now willing to go along with a plan for European Union countries to stop buying Russian oil.
  • Negotiations:
    • Russian Foreign Minister Lavrov said Russia wants to negotiate with the U.S. and that nuclear war is a serious risk. This was after U.S. Defense Secretary Austin said the U.S. wants to see Ukraine stay sovereign and “Russia weakened to the point where it can’t do things like invade Ukraine.”
  • Earnings reporting season is heating up. Coming into this season, at the index level, companies within the S&P 500 Index were projected to have an average earnings-per-share increase of 4.45% year over year, according to FactSet. Sales were projected to rise 10.81% year over year. With 53% of companies reporting, earnings have grown at a 7.02% year-over-year rate while sales have grown at a 12.48% pace. Big technology companies have given mixed results, raising key concerns: whether COVID-19 shutdowns gave an artificial boost to their profits that now need to be given back, and the extent to which supply-chain problems are going to linger.


  • Indonesia announced it will ban the export of palm oil in the hopes of keeping it abundant at home, but it later clarified that the ban would apply only to certain processed palm oil. A total ban would have worsened food inflation and increased the risk that other countries would pursue protectionist policies to hoard resources at home.
  • China’s central bank cut bank foreign-exchange reserve requirements in an attempt to prop up the country’s weakening currency. President Xi said the country will invest in infrastructure to help growth rebound.
  • The Bank of Japan kept policy unchanged despite the expectation that the central bank might adjust its longer-term government bond target to help stop the depreciation of the yen.
  • Sweden’s central bank surprised markets by hiking rates.
  • Turkey is trying to attract foreign currencies. It’s offering to lend at 0% interest and guarantee a 4% return in U.S. dollars to investors who are willing to buy Turkish bonds with a maturity of at least two years.


  • Emmanuel Macron won reelection as president of France.
  • Rising COVID-19 cases in Beijing triggered some fears in investors that China will broaden its lockdowns as the country continues with its zero-COVID-19 policies.
  • China’s main policy-setting body pledged broad-based support to hit the country’s economic growth targets.
  • U.S. and China’s regulators are discussing allowing on-site audit inspections of Chinese companies listed on U.S. exchanges to help keep the companies’ shares from being delisted.

The week to come

  • It will be another busy week of earnings releases by S&P 500 companies. The big news will be around the Federal Open Market Committee statement on Wednesday and then the April employment situation report on Friday. The Federal Reserve (Fed) is likely to hike rates by 0.5 percentage points and announce it will start shrinking its balance sheet.
  • There are a number of notable data releases in the week ahead in addition to Friday’s employment situation report. On Monday, the Institute for Supply Management releases its survey results for manufacturing, and then on Wednesday, it releases its survey of the services sector.
  • Outside the U.S., Australia’s central bank has a policy meeting Monday and the Bank of England has its policy announcement on Thursday.

The month that was

  • First-quarter gross domestic product (GDP) in the U.S. fell at a 1.4% annualized pace. The headline drop was due to inventory swings and changes in the trade balance. Real spending by households was solid, growing faster in the first quarter than in the fourth quarter of last year. There was a healthy improvement in services spending. Equipment spending by businesses also accelerated. Households and businesses will still have to wrestle with higher food, fuel, and financing costs, but at least they were on a pretty solid footing in the first quarter.
  • The Bank of Japan (BOJ) intervened in the Japanese Government Bond (JGB) market. The BOJ has been practicing “yield curve control” and the 10-year and longer portion of the yield curve has gotten a little out of control. The BOJ seems willing and able to purchase unlimited JGBs to push yields lower.
  • Inflation numbers for March were high but in line with expectations. It’s possible this is as bad it gets now that food and fuel prices have come off of their March highs. Inflation will likely be supported by services, especially rents, for the next year. Other components, like durable and nondurable goods, could help bend the inflation curve lower.
  • Nonfarm payrolls in the U.S. expanded by 431,000 in March, and the unemployment rate dropped to 3.6%.
  • Almost all Fed officials are in favor of a 50-basis-point (bp; 100 bps equal 1.00%) hike when they meet on May 4. They may also announce a plan to shrink the Fed’s balance sheet. According to the minutes from the March meeting, they plan to reduce their mortgage-backed securities holdings by $35 billion per month and their Treasury securities by $60 billion per month—starting with their Treasury notes and bonds and then eventually shifting to Treasury bills. The minutes indicated the Fed might phase in this runoff over the course of three months.
  • President Biden extended a pause on student loan repayments through August 31.
  • The Senate voted unanimously to strip Russia of its most favored nation status, making it easier to impose tariffs and restrictions on a broader range of goods.
  • There were a number of central bank policy meetings. New Zealand’s central bank hiked its policy rate by 50 bps. The Bank of Canada also hiked rates 50 bps. The Bank of Korea hiked rates 25 bps. The European Central Bank didn’t make any changes. It still plans on wrapping up its asset purchases in the third quarter.
  • China’s first-quarter GDP grew 4.8% year over year, beating expectations. The country’s industrial production in March increased 5% year over year and its retail sales fell 0.4% year over year. China’s government is pledging to help support growth to hit the country’s growth targets.
  • The World Bank and the International Monetary Fund (IMF) downgraded their growth outlooks for 2022 in light of high inflation and the war in Ukraine. The World Bank cut its forecast from 4.1% to 3.2%. The IMF’s forecast was revised down to 3.6% from 4.4%.

Thanks for reading, stay informed!

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