📑 Research Notes for 2022-03-07

This week, we look at Powell's comments on rate hikes during a geopolitical shock, the volatility in equity derivatives, possible sanctions on India, and the huge wave of housing supply incoming.

We conduct extensive investment research and share the most interesting content that we come across every week. Here is a curated list of this week’s top observations.

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Fed Chair Powell Says Rate Hikes are Still Coming.

(CNBC)

Fed Chairman Jerome Powell said Wednesday he still sees interest rate hikes ahead though he noted the "implications for the U.S. economy are highly uncertain" from the Ukraine war. Powell called the labor market "extremely tight" and said inflation has risen well above the Fed's 2% target. Powell said he sees a series of quarter-percentage-point increases coming, though he left open the possibility of moving more aggressively should inflation persist.

🔗 Source

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Equity Implied Volatility Remains Subdued Compared to the Fixed Income Equivalents.

(Bloomberg)

“If you look at the fixed income market, the volatility levels are hitting essentially the March 2020 peaks, and we are nowhere near that in the equity volatility markets… I actually think that equity volatility still has a long way to go up despite how pricey it looks.”

🔗 Source

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Biden Weighing Sanctions on India over Russian Military Stockpiles.

(The Hill)

The Biden administration is weighing whether to impose sanctions against India over its stockpile of and reliance on Russian military equipment as part of the wide-ranging consequences the West is seeking to impose on Moscow over its invasion of Ukraine.

🔗 Source

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Atlanta Fed’s GDPNow Points to No Economic Growth For Q1 2022.

(Atlanta Fed)

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A Huge Wave of Housing Supply Will Soon Hit the Market.

(Mish Talk)

Housing starts are seasonally-adjusted and annualized, but home building has been at an above-trend pace since January 2021. The long-term chart of new homes for sale without the seasonal adjustments better shows the coming supply. And that supply is coming with the stock market falling, geopolitical tensions rising, and mortgage rates the highest in a couple of years. This could put a damper on prices, cooling off overheated housing and rental markets.

🔗 Source

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Last Week’s Market Performance Heatmap

(FinViz)

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Curated by Joseph Lu, CFA®

Joseph is the founder and managing director of Conscious Capital Advisors and a CFA® Charterholder.

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The information presented in this newsletter is for educational purposes only and is not a solicitation or recommendation for any specific security, product, service, or investment strategy.

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