Gonet: market news from March 25

Dow +1.02%, S&P 500 +1.43%, Nasdaq +1.93%, Russell 2000 +1.13%, SOX +5.13%, Eurostoxx -0.15%, SMI +0.26% .

Wall Street continues to rise, and Europe is much less serene, the war on the threshold obliges. The US stock market closes at the high of the session, the S&P500 (SPX) index easily recovers its 200-day moving average with volumes worthy of a “disabled” session on MTV (if you don’t know MTV, so go back). to your Tik Tok channel…). SPX’s 11 major sectors ended the session in positive territory, led by technologies, materials and communication services. In terms of volatility, we seem to be feeling a retreat, VIX (SPX volatility) fell 8% and is back at 21.67. The breadth (the spread between stocks closing higher versus stocks closing lower) is excellent, with 88% positive results on SPX and, icing on the cake, 92% on Nasdaq100 (NDX). The NDX is consolidating its position above its 50-day moving average and has currently recovered 12% since entering the bear market. Not much short coverage was reported and we saw $2 billion in buying interest at the close.

This is yesterday’s market behavior. Now it remains to understand why such an increase?

Well… This is where the exercise becomes more difficult. Let’s not look from the side of the bond market. The latter continue to give alarm signals, 10-year US bonds change by 2.36%, the spread between 2-year and 10-year bonds remains at 21 points, weakening in this part is not reported. Oil fell very slightly, with a barrel of WTI Light Crude back to $111.71, not enough to ease inflationary fears. Gold has returned to $1,955 an ounce, which is by no means an indication that investors are regaining their appetite for risk. The dollar strengthened slightly and this morning rose to 1.1028 against the euro, which again is not enough to write an article. One can imagine that the declaration by the chief of staff of the President of Ukraine, which indicates progress in negotiations with the Russians, could cause some optimism, but who will believe that this corresponds to the reality on the ground? However, when we look at the behavior of various sectors, the good performance of technologies, especially semiconductors, makes a strong impression. The industry is asking Congress to increase subsidies for chip development in the US.

At the same time, the “homegrown story” theme seems to have been gaining momentum for some time now, a theme that celebrates people who work hard and do everything well. These people are building community food systems, investing in clean energy savings and jobs, supporting fair transition work, and fighting for a sustainable future. In short, will the current context of the end of covid + war be the death knell for globalization?

Joe Biden calls for Russia’s exit from the G-20. The United States and its allies warn Vladimir Putin against using biological, chemical or nuclear weapons in Ukraine. The warning came as US officials fear the Russian leader could lash out dangerously when his troops get bogged down, according to Bloomberg. Failure to quickly overwhelm the Ukrainian army increases the risk of what the security services call “vertical escalation.”

Moscow must pay for energy exports in the currency specified in the contract, usually dollars or euros, EU leaders including Olaf Scholz and Mario Draghi say, dismissing Putin’s plans to demand payment for gas in rubles. Joe Biden will announce an agreement this morning to help Europe push out Russian gas imports, a senior EU official said. Filling EU gas storage facilities to 80% ahead of the coming winter will cost around 62 billion euros. EU officials suspect that China is ready to supply Russia with semiconductors and other technological equipment to mitigate the effects of sanctions, Bloomberg reports. Joe Biden says he briefed Xi Jinping on “significant risks” to the Chinese economy if he supported Russia’s invasion of Ukraine. Beijing dismisses as “disinformation” reports that it has agreed to go to war.

Confidence indexes are in the spotlight today, with the Ifo German Business Community Index at 11:00 am and then the University of Michigan American Consumer Index at 3:00 pm.

STMicroelectronics will pay a dividend of $0.24 per share for 2021. According to Bloomberg, Apple is working on a hardware subscription system for the iPhone. SAP will stop its cloud business in Russia after the completion of sales in the country on March 3. Moody’s is going to withdraw its credit ratings for Russian companies.

In Asia this evening and this morning, indices are trading near equilibrium, with the exception of Hong Kong and Shanghai, which fell 2.76% and 1.17% respectively. Tokyo added 0.14%, while Seoul remained unchanged. Future flat SPX and Europe are opening around the balance.

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