Daily market review

United States

Equities rebounded Thursday afternoon as markets judged President Biden's new round of sanctions on Russia as much milder than expected and the market appeared oversold. The Dow Jones industrial average, after opening 2.5 percent lower, ended 0.3 percent higher on the session, the S&P 500 gained 1.5 percent, and the NASDAQ jumped 3.4 percent.

Markets were on edge awaiting Biden's afternoon announcement of new sanctions after Russia's invasion of Ukraine overnight. When the sanctions announcement came, around 1:45 pm ET, it did not include sanctions on Russian President Vladimir Putin, no were there limits on Russian energy exports, which account for more than 60 percent of its export earnings, and no ban from SWIFT, the global bank payments system. There were limits on Russia's ability to transact in dollars and other hard currencies, plus asset freezes on Russian banks, and other steps.

Leading the recovery in US equities were hard-hit FANMAG and other growth stocks, as investors bought the massive dip with tech and communications services leading. Apple ended up 1.7 percent after opening down about 5 percent. Amazon ended up 4.5 percent after a similar decline at the open. Salesforce rose 7.2 percent to lead software stocks higher. Defense stocks rallied on the war news, with Raytheon up 2.2 percent and Lockheed up 1.7 percent.

Banks, among the worst off on the Ukraine trade, remained weaker but well off their lows, with JP Morgan ending down 2.8 percent after being down about 6 percent at midday. Energy stocks faltered as oil prices gave back most of their overnight rally in the absence of sanctions on Russian oil, and as President Biden pledged steps to limit oil price increases.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$2.36 to US$99.00 while spot gold fell US$14.03 to US$1,896.04. The US dollar rose sharply vs. major currencies. Yields on the US Treasury 30-year bond declined 1 basis point to 2.28 percent, and the 10-year note was down 2 basis points at 1.97 percent.


Fallout from Russia's invasion of Ukraine sank equities with losses across all sectors. The Europe-wide STOXX 600 dropped 3.3 percent, the German DAX fell 4.0 percent, the French CAC lost 3.8 percent, and UK FTSE 100 was down 3.9 percent.

Investors focused on rising prices for oil and other commodities as a result of the Russian military action, and anticipated new disruptions in supply chains and higher prices for goods including Ukrainian neon, an essential element in semiconductors.

Banks, which are seen as the sector most exposed to Russia and financial sanctions imposed by the west, were hit hardest, with a decline of roughly 8 percent. Other laggards were autos & parts, construction & materials, personal & household goods, insurance, financial services, and travel & leisure. Airlines were notable losers as Ukraine airspace was closed.

Surging oil prices helped oil & gas stocks outperform, along with utilities. Defense stocks advanced on the war trade, including BAE Systems, up 4.7 percent. On the downside Barclays Bank dropped 8.5 percent and Deutsche Bank plunged 12 percent.

Asia Pacific

Asia/Pacific markets dropped in a flight from risk while oil and traditional safe havens including gold surged on news of Russia's invasion of Ukraine. Growth-heavy markets suffered biggest losses, with India and Hong Kong off the most.

China's CSI 300 index dropped 2.0 percent and the value-stock heavy Shanghai composite lost 1.7 percent. The Hong Kong Hang Seng index plunged 3.2 percent. Tech, telecom, and consumer staples lagged while energy stocks fared best with rising oil prices.

The Taiwan Taiex and the South Korean KOSPI both dropped 2.6 percent. Indian equities sank with the BSE Sensex off 4.7 percent, with losses across the board.

Japan's Nikkei 225 lost 1.8 percent and the TOPIX lost 1.3 percent. Most sectors sank with air transportation and cyclicals leading to the downside. Basic resources held up best.

The Australian All Ordinaries index dropped 3.0 percent with technology, banks, and miners among the hardest hit. A batch of weak earnings reports added to the gloom.

Looking ahead*

In Asia/Pacific, New Zealand merchandise trade, New Zealand retail trade, and Singapore industrial production reports are scheduled. In Europe, German GDP, French consumer manufactured goods, French CPI, French GDP, French PPI, Eurozone M3 money supply, Italian business & consumer confidence, and Eurozone EC economic sentiment reports are due. In North America, US durable goods, US personal income & outlays, US consumer sentiment, and US pending home sales reports are on tap.

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