Ukraine Tensions

February 28, 2022

February is the only month of the year that has, on average, showed a return of 0%. The month was a busy one for earnings reports and we saw many of the highflyers from 2021 experience sharp declines.  The correction that began in January continued into February and at one point 40% of the companies in the S&P 500 were down 50% or more. We expected Putin to wait until after the Olympics to do anything with Ukraine and the day after the closing ceremony he recognized 2 rebel backed sections of Ukraine and 2 days later the invasion began.  It is hard to imagine something like this in 2022, but Putin is an unpredictable person with unlimited power who has an end game that is hard to decipher.  The S&P 500 lost 5.3% in January and another 3.1% in February for a year-to-date loss of 8.2%.  Fear of the unknown drove oil prices 10.8% higher to an 8 year high and gold gained 5.9% to an 18-month high.  The interest rate on the 10-year Treasury rose 4%.

The month began with a nice rally after Google parent company Alphabet announced a surprising 20:1 stock split, but the gain was erased the following day after a disappointing quarterly report from Facebook sent those shares down 25% and the NASDAQ down 539 points.  We ended the first 4 days of trading with the S&P 500 down .3%.  The first full week of the month we learned inflation was at a 40 year high which drove the rate on the 10-year Treasury above 2% for the first time since August 2019.  In addition, concerns about what Russia was going to do in Ukraine sent the market lower and we ended the week with a loss of 1.8%.  During the second full week of the month there was a report from the Russian government that some troops had return to base and we learned retail sales in January were much stronger than expected.  Despite the good news the S&P 500 lost 1.6% for the week as the uncertainty in Ukraine pushed some to sell ahead of the 3 day President’s Day weekend.  The last full week of the month was shortened by the holiday and saw very volatile trading after Russia did invade Ukraine.  However, after 3-days of aggressive selling to begin the week a rally on Friday gave us the best day for the market since 2020 and helped the S&P 500 to a .8% gain.  The last trading day of the month continued to be volatile as events in Ukraine continue to be volatile.

March has historically been an average performance month for the market, but we are not sure historical averages are going to come into play.  The market is likely to be driven by events in Ukraine.  At this point it is hard to see Putin’s end game and the options that are available to stop him.  We would expect the market to react positively to any reduction in hostility and negatively to any acceleration.  Russia is being isolated by most of the rest of the world and we would expect them to do something to retaliate.  In the perfect world Putin will realize he has made a huge mistake and try to find a way to exit with dignity.  However, he lives in a world unlike the rest of us.  For the last 2 years we have been buyers on these dips and continue to believe that is the appropriate strategy.  While market valuations continue to be higher than the historic norm, many high-quality stocks are down 50% or more.

If you know someone who would be interested in learning more about Greenberg Financial Group, please contact us at 520-544-4909, or visit our NEW website at As always, the key to successful investing is to have a portfolio that is consistent with your investment objectives and risk tolerance. We invite you to listen to our weekly Money Matters radio show which airs every Sunday Morning from 8:00 AM to 10:00 AM on KNST AM 790.  You can also listen to us on iHeart radio, follow us on Twitter @gbergfinancial or on Facebook under Greenberg Financial Group.  Previous shows are now available at or by using the iHeart app.

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