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 May 7–13, 2022.

The week that was

  • Equity markets continued to slide, with the S&P 500 Index getting close to a 20% drawdown from its January 3rd high. As typical for market corrections, it’s been driven by the unholy trinity of fears of growth, inflation, and geopolitics. Bear markets are when these fears become reality.

Russia-Ukraine update:

  • Actions:
    • In a Russian airstrike in Luhansk, an eastern region in Ukraine, 60 Ukrainian villagers who were taking shelter in a school were killed.
    • First Lady Dr. Jill Biden visited Ukraine. Canada’s Prime Minister, Justin Trudeau, also visited Ukraine to reopen Canada’s embassy in Kyiv.
    • During its Victory Day celebrations on May 9, Russian President Putin defended his invasion of Ukraine, calling it a special operation, but he didn’t take the opportunity to announce an escalation or to call up reservists to fight.
    • On Monday, President Biden signed the Ukraine Democracy Defense Lend-Lease Act of 2022. The act is similar to the lend-lease law of 1941, where the U.S. was able to help arm the U.K. in WWII.
  • Sanctions:
    • The European Union is negotiating terms among member countries to stop Russian oil imports. Hungary, Slovakia, the Czech Republic, and Croatia are asking for more time to phase in the import ban.
    • G7 countries agreed to phase out the importation of Russian oil.
    • The U.S. imposed sanctions against Gazprombank executives.
    • Ukraine said it will reduce natural gas flows through its territory in response to Russia’s interference.
    • The U.S. suspended tariffs on Ukrainian steel for one year.
    • Russia sanctioned a Polish pipeline operator, sending natural gas prices even higher. Russia is showing that it may try to cut off its natural gas supplies to Europe.
  • Negotiations:
    • Talks between Ukraine and Russia are at a standstill.
    • Finland said it will apply for NATO membership, and Sweden is likely to follow suit.


  • Earnings reporting season is winding down. 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 91% of companies reporting, earnings have grown at a 9.11% year-over-year rate while sales have grown at a 13.43% pace.


  • U.S. inflation in April was hotter than expected. The year-over-year number is rolling over, so the month-over-month number is much more informative. Energy prices fell from their March highs. Apparel and used-car prices fell for the month. New-car prices rose, but that’s because the Bureau of Labor Statistics used a new data source; they need to rebase their series. Airline fares were up more than 18% as people are traveling like they haven’t traveled in a while because, well, they haven’t traveled in a while!
  • In China, Premier Li Keqiang ordered officials to take action against a “complicated and grim” employment situation. The employment situation has been caused by China’s zero-COVID-19 approach for handling the virus, with rolling lockdowns of broad swaths of the country.
  • Lisa Cook was confirmed by the Senate to the Federal Reserve’s (Fed’s) Board of Governors. Dr. Cook is the first Black woman to serve on the Board.
  • Lorie Logan will become the next president of the Dallas Fed. She previously headed up the System Open Market Account (the tool used for implementing monetary policy) at the New York Fed. She also led the Market Operations, Monitoring, and Analysis team at the New York Fed.
  • Fed Chair Jerome Powell was reconfirmed to the position by the Senate.


  • North Korea fired a short-range, submarine-launched missile off its coast.
  • John Lee was elected chief executive of Hong Kong by a pro-Beijing committee. Mr. Lee oversaw the crackdown on Hong Kong’s pro-democracy movement.
  • Ferdinand Marcos Jr. won the presidential election in the Philippines. Marcos, known as Bongbong, is the son of former Philippine Dictator Ferdinand Marcos.
  • On Tuesday, President Biden delivered a speech in which he said inflation is his top domestic priority.
  • Sri Lanka continues to be a mess. After Gotabaya Rajapaska won the 2019 election on the pledge to dramatically cut taxes, the country’s finances crumbled. He then assumed greater power from the Parliament of Sri Lanka. The country’s government defaulted on its debt. Citizens have been protesting over shortages of many essential goods, and those protests have turned violent.

The week to come

  • Retail sales and industrial production numbers will be the major focus for next week. China’s numbers for April come out on Sunday (May 15) while the U.S.’s April numbers come out on Tuesday.
  • We get some U.S. housing numbers this upcoming week, with April’s housing starts on Wednesday and April’s existing-home sales on Thursday.
  • Japan’s first-quarter gross domestic product data are released on Tuesday, and the U.K.‘s April inflation numbers come out on Wednesday.

Thanks for reading, stay informed!


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