As Russia continues to pound Ukraine, markets across the world are also taking a beating. After four consecutive weeks of declines, Monday’s session remained on trend.
Despite a slew of sanctions from the West, and an ever-growing list of corporations cutting ties with Russia, President Vladimir Putin appears set to plow ahead until Ukraine gives in. Although talks between the two nations are ongoing, little progress has been made. Perhaps more disturbingly, humanitarian efforts are being thwarted at every turn. However, Russia’s reported plans for a temporary ceasefire may have provided some relief.
The next step would appear to be a U.S. ban on Russian oil and gas exports, but it remains to be seen if other countries will follow suit. This would likely send energy prices even higher, further stoking fears of a global economic slowdown. Yesterday, the price of Brent crude jumped to $139 a barrel before retreating to $125, while West Texas Intermediate (WTI) hit $130 a barrel, its highest point in 13 years. But oil is not alone in its meteoric rise in the wake of the conflict. Prices for copper, nickel, wheat, and other commodities are also spiking.
Altogether, the Dow Jones Industrials lost 797 points, or 2.4% during yesterday’s session, the more-broadly diversified S&P 500, was down 128 points (-3%), and the tech-heavy NASDAQ composite fared the worst of the lot, sliding by 482 points (-3.6%). The S&P 500, now down 12% from its all-time high, sits in correction territory (marked by a decline of 10% from a recent peak), while the NASDAQ, down more than 20%, is now officially in bear market territory. Breaking things down further by sector, consumer discretionary stocks took the biggest hit, falling 4.8%. Communication, technology, and financials also did poorly, all falling about 3.7%. On the other hand, energy stocks gained more ground on supply worries, advancing 1.6%, while safe-haven utility issues were up 1.3%.
With the new day, the red ink continues to flow, with stocks in Asia posting losses overnight, while the European markets are mixed. On our shores, futures for the major stock indexes are all pointing to a modestly negative open. Meanwhile, WTI oil futures are up nearly 4%, to just under $124 a barrel.
This week’s economic schedule includes the latest on initial jobless claims and the consumer price index for February, both being released on Thursday. The market, however, will remain laser-focused on geopolitical developments. As the threat of further escalation increases, it will likely continue to be tough sledding for investors in the days ahead.
– Mario Ferro
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
