The three major stock market indexes posted losses last week, with the S&P 500 breaking a three-week winning streak that had lifted it to its best performance since 2020, as investors reacted to the Federal Reserve's more aggressive tone in fighting inflation. Throughout the week, investors reviewed comments from Fed officials as well as the latest minutes that showed policy makers were considering raising rates and unwinding its balance sheet faster, which drove stocks lower.

The week ahead marks the beginning of the Q1 earnings season, with big banks such as JPMorgan Chase, Goldman Sachs and Wells Fargo reporting earnings. FactSet forecasts that S&P 500 profits will rise by 10% from a year ago. They also noted that analysts had the highest number of “buy” recommendations in a decade.

Federal Reserve speakers will also make the rounds as investors continue to eye the pace of rate hikes, while the economic calendar is headlined by the highly anticipated Consumer Price Index report. The CPI reading showed an 8.5% increase from a year ago compared to analysts’ estimates of 8.4%. That's an acceleration from the pace seen in February. Updates on producer prices, retail sales and consumer sentiment are also due in this week.

Over the weekend a train station in Ukraine was struck by a missile which resulted in 52 deaths. This, along with the Russian war crimes, caused Ukrainian President Zelensky to ask for military aid as they prepare for heavy battles in eastern Ukraine. The war has led to revisions in growth estimates as the World Bank cut Russian growth to -45% and Ukrainian growth to -11%. This comes after Russia’s rail company defaulted and Ukraine’s crop estimates were cut by 40%.

While near-term volatility and uncertainty can be unnerving, proper asset allocation coupled with security selection are in place to ensure a prudent strategy in these turbulent times. If questions arise or you just want to talk, please reach out to your wealth advisor.