Daily market review

United States

Major stock indexes seesawed to end mostly weaker Monday amid Ukraine worries and rising bond yields. The Dow Jones industrial average declined 0.5 percent, the S&P 500 lost 0.4 percent and the NASDAQ was unchanged.

Stocks gave up midday gains after Ukrainian President Volodymyr Zelensky said he expects Russia to attack his country on Wednesday and after CBS News reported additional deployments of Russian artillery at the Ukrainian border. Zelensky, a former comedian, later reportedly said his comment about the invasion date was intended to be sarcastic.

Earlier, risk appetite had recovered after Russian Foreign Minister Sergei Lavrov made comments that suggested a willingness to pursue diplomacy, but sentiment swung back quickly.

Rising bond yields added to selling pressure amid conflicting comments from Federal Reserve officials on the likely pace of tightening. Stocks reacted during the US morning to comments that suggested support for a gradual approach. That contrasted with rising market expectations for an initial 50 basis point rate increase, with speculation that the first move might even come before the regular March policy meeting. Kansas City Fed President Esther George, a voting member of the Federal Open Market Committee, called for a "systematic" and "gradual" approach in comments to the Wall Street Journal. On the hawkish side, however, St. Louis Fed President Jim Bullard, another FOMC voter, repeated his support for faster rate increases in an interview with CNBC.

FANMAG stocks retreated in the afternoon after rising on bargain hunting in the morning, but growth stocks continued to outpace value/cyclicals as investors liked some sectors, including chipmakers, with Nvidia up 1.3 percent, and Advanced Micro Devices up 0.9 percent after concluding its purchase of Xilinx, another chipmaker.

On the downside, energy retreated after recent gains, despite rising oil prices, and financials weakened, too, despite higher bond yields. Biotech and pharma names lagged, including Moderna, down 12 percent, and Pfizer, off 1.9 percent.

Among stocks in focus, Goodyear Tire rose 1.5 percent after an analyst upgrade. Rivian, the electric vehicle stock, rose 6.5 percent on news that George Soros bought a stake. Splunk rose 9.1 percent on a report that Cisco offered to buy the software maker. 3M was off 1.0 percent after disappointing sales guidance and warning on lower mask sales as the pandemic eases.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose 86 cents to US$95.89 while spot gold rose US$10.05 to US$1,871.69. The US dollar rose vs. most major currencies. Yields on the US Treasury 30-year bond rose 6 basis points to 2.30 percent, and the 10-year note rose 7 basis points to 2.00 percent.


War fears hit equities, with banks and travel & leisure stocks with exposure to Ukraine off the most. The Europe-wide STOXX 600 lost 1.9 percent, the German DAX fell 2.0 percent, the French CAC dropped 2.3 percent, and the UK FTSE 100 was down 1.7 percent.

Equities recovered somewhat after a televised exchange between Russian Foreign Minister Sergei Lavrov and President Vladimir Putin, with Lavrov telling Putin that diplomatic efforts should continue.

Among sectors, basic resources held up best as commodity prices surged. Other winners were real estate and health care. On the downside, banks, utilities, insurance, autos, and construction & materials lagged. European airlines suffered after reports that they were avoiding Ukrainian airspace. IAG, owner of British Airways, fell 5.6 percent, and Wizz Air fell 6.3 percent.

Among companies in focus, Clariant, the chemicals giant, fell 16 percent after delaying its earnings release to investigate accounting concerns. Kesko, the retailer, lost 1.5 percent after disappointing trading results. On the positive side, Ratos, the private equity company, rose 7.0 percent on an earnings beat.

Asia Pacific

Asia/Pacific markets sank on carryover from Friday's losses on Wall Street amid fear of conflict in Ukraine and expectations for aggressive Federal Reserve tightening.

Japan's markets saw heavy losses with the Nikkei 225 down 2.2 percent and the wider TOPIX index losing 1.6 percent. Among big names, Toyota, down 3.2 percent, and Fast Retailing, down 3.1 percent, were leading decliners.

China's CSI 300 index fell 1.1 percent and the value-stock heavy Shanghai composite declined 1.0 percent. Hong Kong's Hang Seng index lost 1.4 percent, with property stocks off again and concern rising over a stricter anti-Covid lockdown as case counts rise.

The Taiwan Taiex declined 1.7 percent and the South Korean KOSPI lost 1.6 percent with tech stocks weak. Indian equities were hit hard with the BSE SENSEX down 3.0 percent on Ukraine worries. Banks were among the laggards, including ICICI Bank, down 4.7 percent, and IndusInd Bank, down 4.6 percent.

Commodities price increases lifted Australian equities with the All Ordinaries index up 0.3 percent. Gold and energy prices led the way higher, with weakness in non-commodities stocks on the global flight from risk.

Looking ahead*

In Asia/Pacific, Japanese GDP, Indian merchandise trade, and Reserve Bank of Australia meeting minutes are scheduled. In Europe, UK Labour Market Report, German ZEW survey, Eurozone GDP flash, and Eurozone merchandise trade reports are due. In North America, Canadian housing starts, US PPI-FD, US Empire State Manufacturing, and US Treasury TICS reports are on tap.

Global Stock Market Recap

Global Bond Market Recap

Global Currency Recap

Commodities and currencies