Oil prices drop a bit
Swing stock market back in the black
03/24/2022, 21:47
Interest rates and oil price fluctuations as a result of the war make courses on the US stock exchanges. At the same time, the belief in strong interest rate hikes is gaining ground. Investors are thus attached to the development of commodities.
The alternation between rising and falling prices has continued on Wall Street. After the strong losses of the previous day, triggered by rising oil prices and the prospect of more aggressive interest rate hikes by the US Federal Reserve, the indices went up again. The falling oil prices also eased the situation somewhat. But the mood remained shaky. “Up until mid-February it was all about rising interest rates and then the Ukraine war and what’s worrying now is that the two are converging,” said Daniel Morris, chief markets strategist at BNP Paribas Asset Management.
Fighting continued unabated in Ukraine and there were no signs of progress in talks towards a diplomatic solution. The G7 countries have threatened Russia with further sanctions over the war of aggression against Ukraine. US President Joe Biden has also spoken out in favor of excluding Moscow from the G20 group. the Dow Jones Index improved by 1.0 percent to 34,708 points. For the wider consolidated S&P 500 it went up 1.4 percent and the Nasdaq Composite gained 1.9 percent.
Voices for a stronger rise in interest rates are increasing
Meanwhile, voices within the US Federal Reserve in favor of a more rapid tightening of monetary policy increased. The President of the Federal Reserve Bank of Chicago, Charles Evans, also agrees with the Fed’s view that monetary policy needs to be tightened to bring high inflation under control.
Morgan Stanley has also shifted the interest rate forecast for the US Federal Reserve in a more hawkish direction. “We now expect the Fed to hike rates by 50 basis points at both its May and June meetings, with a 25 basis point hike for the remainder of the year,” the economists said.
The US economic data showed light and shadow. That’s how they have it weekly initial applications fell more than expected to their lowest level since 1969. the US Durable Goods Orders has fallen surprisingly sharply in February. The current account deficit in the fourth quarter it fell slightly more than economists had forecast.
A positive surprise was the increase in the composite index for the S&P Global survey production in the private sector – Industry and service providers together. “Geopolitical concerns over the Ukraine war, higher living costs and monetary tightening are largely being offset by hopes for a stronger economy as the effects of the pandemic continue to fade,” said Chris Williamson, S&P Global chief economist.
Looking for semiconductor stocks
The oil market continued to be characterized by volatility due to the Ukraine war. For the prices of STI and Brent went back down after yesterday’s strong gains. Most recently, the prospect of further sanctions against Russia and Russia’s announcement that it would only accept rubles to pay for gas deliveries in the future pushed up oil prices. According to BNP Paribas, oil prices are likely to average above $100 a barrel until at least the end of 2023, even if the Ukraine war is quickly ended.
At the bond market Yields rose again after rebounding from their highest levels since 2019 the previous day. Investors referred to the significantly better purchasing manager indices. “They have shelved every thought of recession,” said one dealer.
Semiconductor stocks such as Nvidia (9.8 percent) and intel (6.9 percent). Here investors are betting that the high demand will push the logistics problems into the background. For the Uber stock was up 5 percent after the ride-hailing agency struck an agreement listing all New York cabs on its app.
HB Fuller gained 0.7 percent after the adhesives maker raised its earnings targets for the current year when it presented figures for the first fiscal quarter. Numbers and outlook didn’t come off well KB Home (minus 4.6 percent). The construction company specializing in homes complained, among other things, about supply chain problems.