Week in Review: April 29, 2022

Markets ended a volatile week lower as investors digested a slew of earnings reports, along with important economic data. Friday saw a particularly sharp selloff following reports from Apple and Amazon which raised concerns about persistent supply chain and inflationary pressures. Beyond earnings, investors continue to fret about inflation, monetary policy, fighting in Ukraine, and Chinese lockdowns. April’s -8.8% decline marked the worst month for the S&P 500 since March 2020, while the NASDAQ’s -13.3% decline was the index’s largest since October 2008.

Due to continued fighting in Ukraine, Indonesia, the world’s largest palm oil exporter, announced a ban on palm oil exports in an effort to protect the country from rising inflation and ensure enough domestic supply. The announcement was precipitated by soaring global vegetable oil prices that have risen 50% over the past six months, due in part to the disruption of Ukrainian sunflower seed oil exports, which account for ~50% of global supply. As those exports have dwindled, consumers have turned to other substitutes, driving prices for all vegetable oils higher. Indonesia’s ban will exacerbate already soaring food prices, placing additional upward pressure on global inflation as well as increasing the number of people faced with food insecurity.

In an effort to slow the spread of new Coronavirus cases in its capital, China imposed targeted lockdowns in Beijing, raising the specter of a full lockdown similar to the one implemented in Shanghai. Spreading lockdowns will further impact China’s economic growth as well as global supply chains.

Through Friday, 55% of S&P 500 companies had reported earnings, with 80% of those beating their consensus estimate.