Dow -1.29%, S&P 500 -1.23%, Nasdaq -1.32%, Russell 2000 -1.73%, SOX -2.48%, Eurostoxx -1.45%, SMI -0.85% .
Wall Street is collapsing, oil prices are rising. A barrel of WTI Light Crude returns to the $115 zone, the commodity is in demand all over the world, and the market suddenly remembers that this could create a “very small” problem of runaway inflation. Energy prices are skyrocketing after Vladimir Putin demanded that Russian gas bills for countries opposing the war in Ukraine be paid in rubles. The President of Russia is trying to impose a hand on the West. Add to that some really bad liquidity and stocks are heading south again with NYSE trading volumes of less than 11 billion shares. The S&P500 (SPX) falls back below its 200-day moving average at the bell level while the Nasdaq100 (NDX) tries to fight back but eventually throws in the towel while still managing to hold above its 50-day close. The market seems to have crystallized because of the clash between rising bond rates and the war in Ukraine.
Volatility picks up a bit as the VIX returns to 23.57 and we see $1.3bn selling at the close, enough to close the indices at the low of the day as liquidity in this market has dried up badly. As for the SPX sectors, only energy and utilities managed to end the session in positive territory, risk aversion returned, and so-called value stocks favored growth stocks. The market is worried about today’s meeting between Joe Biden and his European allies (NATO, G-7 and EU leaders), who may announce new sanctions against Russia. The breadth (the spread between stocks closing higher versus stocks closing lower) is extremely small, with a positive SPX of 18%.
Apple (AAPL +0.8%) posted solid gains given yesterday’s market action. Chip makers reported relative weakness while Adobe (ADBE -9.3%) ended the day at the bottom of the tech sector after its first quarter results were overshadowed by earnings-per-share forecasts and sales below the second-quarter consensus. quarter. The word about Wall Street-listed Chinese stocks continuing to meet strong demand, probably led by so-called “retail” investors, should go on…
Today, March 24, marks exactly one month since the Russian army entered Ukraine. And it is today that the Russian Stock Exchange is reopening in Moscow. It has been closed since February 25th. This is a partial reopening that includes only 33 firms. Short selling (uncovered) is prohibited for foreigners, this is the rule of the game… at the moment, the MOEX index is up 8.8%.
In the bond market, we are seeing a temporary decline in yields yesterday, which are rising again this morning, 10-year US bonds are developing at 2.35%, while the yield curve remains in “restless” mode, the yield between 2 and 10 years is at level 21 points, and from 5 to 10 years remains inverted, at the level of -2 points. This small air pocket in returns seen yesterday is likely due to the launch of the 20-year tranche, which is attracting many investors enticed by the opportunity to buy stocks close to last year’s lowest levels.
Thus, the United States and the European Union are on the verge of reaching an agreement aimed at reducing Europe’s dependence on Russian energy sources. The deal, which could go through tomorrow, aims to provide Europe with supplies of natural gas and hydrogen from the US, the official says. European Commission President Ursula von der Leyen says the goal is to commit to additional gas supplies over the next two winters.
PMI indicators for the world’s major economies for March will be published during the day. They determine the morale of purchasing managers in large companies. In the United States, durable goods orders and weekly jobless claims are also scheduled (13:30).
Gurit: UBS remains short, target price reduced from 1,500 to 1,450 francs. L’Oréal: Jefferies went from holding to falling short, aiming for €314. Engie will sell part of its stake in Gaztransport & Technigaz, reducing its stake from 20% to 12%. Renault is yielding to pressure and shutting down its Russian plant and exploring the future of its controlling stake in AvtoVAZ. The manufacturer lowers its forecasts for 2022. Nvidia plans to use Intel as a foundry for the manufacture of its chips. Over time, Nestlé will stop selling most of its brands in Russia. Credit Suisse to lose $500 million in Bermuda dispute. Zur Rose increased its net loss in 2021. The FDA has approved Novartis’ Pluvicto. A Paris appeals court is due to re-examine on Thursday the legality of an indictment of “complicity in crimes against humanity” by French cement group Lafarge (Holcim) in Syria.
In Asia this evening and this morning, indexes are generally trading down, with the exception of Tokyo, which rose 0.25% on the call, the yen continues to weaken against the dollar. Hong Kong fell 0.89%, Shanghai lost 0.63% and Seoul returned 0.20%. SPX futures is 15 pips and Europe opens up 0.3%, oil is losing to the market. As for gold, it rose to 1944 dollars per ounce, while the dollar also strengthened slightly, to 1.0977 against the euro.