Company / Analytics

Week 09 in Brief

North America

• Stocks fell Friday as investors eyed a much stronger-than-expected report on the labor market’s recovery and continued to monitor for global economic fallout from Russia’s war in Ukraine.
• The S&P 500 index fell for the fourth time in five days and commodity prices soared as sanctions on Russia threatened to cause supply disruptions in oil, natural gas, industrial metals and grains.

How did the major indices perform?

• The Dow Jones Industrial Average dropped 179.86 points, or 0.5%, to close at 33,614.80.
• The Nasdaq Composite shed 224.5 points, or 1.7%, to end at 13,313.44.
• The S&P 500 Index fell 34.62 points, or 0.8%, to finish at 4,328.87.

What drove the US market?

• Geopolitics: Stocks fell as Russia’s invasion of Ukraine overshadowed positive U.S. employment data for February that was released Friday morning. Investors were focused on news of a now-extinguished fire at a nuclear power plant in the Ukrainian city of Enerhodar that had been shelled by Russian troops. The plant reportedly has six reactors, and three had been offline before the attack, according to Associated Press reports. Russian military has seized the nuclear power plant, which is the biggest in Europe, the AP reported Friday afternoon. Russia gaining control of the nuclear plant heightens concern that its military will continue to take over other Ukrainian infrastructure such as energy, water, and telecommunications.
• Economic Data: February nonfarm payrolls climbed 678,000, versus a forecast of 440,000. U.S. average hourly earnings rose 1 cent to $31.58 and hours worked rose 0.1 hour. Dow futures plunged about 500 points immediately after the first reports of the nuclear plant fire emerged late Thursday, with the S&P 500 and Nasdaq-100 futures following a similar path.
• Commodity rally: Investors were flocking to safe-haven assets, such as gold and the dollar, while the euro fell more than 1% to about $1.09, a level not seen in nearly two years. Oil prices remained elevated, with West Texas Intermediate crude for April delivery jumping 7.4% Friday to settle at $115.68 a barrel on the New York Mercantile Exchange. That marks the highest front-month finish since September 2008, according to Dow Jones Market Data.
• While Russia is still exporting energy, an estimated 70% of Russia’s oil exports may be on hold because of uncertainty among traders and shippers of Russian oil over how the various sanctions apply to their operations.

Which US stocks were in focus Friday?

• Airbnb Inc. said it would suspend operations in Russia and Belarus, according to a tweet from Chief Executive Officer Brian Chesky. Airbnb shares fell 5.9%.
• Microsoft Corp. also said it was suspending new sales and services in Moscow. Its shares slid just over 2%.
• Travel stocks were weak Friday, with shares of United Airlines plunging 9.1%. Shares of Delta Air Lines fell 5.6% while American Airlines dropped 7.1%.
• The NYSE ARCA exchange has halted trading in the iShares MSCI Russia exchange-traded fund, according to a press release from BlackRock, the ETF’s issuer.

How did the European markets perform?

• European stocks sank to near one-year lows, with the pan-regional STOXX 600 index (.STOXX) sliding 3.56% to increase losses for the week to 7% - its worst weekly decline since the depths of a pandemic-fueled sell-off in March 2020, as anxiety ramped up over an intensifying war in Ukraine. Bank of America said the most money ever flowed out the region over the last week.
• The German DAX closed down 4.41% and French CAC was down 4.97%, while the FTSE 100 index closed down 3.48%.
• Bank of America said Friday that $6.7 billion flowed out of Europe over the last week, the most on record. Any March de-escalation of the Russia-Ukraine conflict will likely cause a “big bear rally in risk assets but we say sell-the-rip as Fed/ECB is now hopelessly trapped between Wall St deflation & Main St inflation.
• Nearly every stock sector in Europe was under pressure, with banks leading the way south. HSBC shares slid 6% and Deutsche Bank shares tumbled 10%. Heavily weighted energy names such as Shell, TotalEnergies and BP remained elevated Friday.
• Airlines and auto makers were also hard hit, with Deutsche Lufthansa down 5% and Wizz Air off 7% each and Volkswagen down 6%.
• Russia’s stock market was shut for a fifth day on Friday and will remain closed at least through March 8, the central bank announced.
• The country has been hammered by sanctions as punishment for its invasion of Ukraine. The London Stock Exchange on Friday announced the suspension of more Russian companies with secondary listings.

How did Asian markets perform?

In Asia, the Shanghai Composite closed down 1% Friday and slipped 0.1% for the week. The Hang Seng Index declined 2.5% in Hong Kong Friday for a weekly drop of 3.8%. Japan’s Nikkei 225 gave up 2.2% Friday and slid 1.85% for the week.

Bonds

The yield on the 10-year Treasury note TMUBMUSD10Y fell 12.1 basis points Friday to 1.722% for a weekly decline of 26.2 basis points. That’s the largest weekly drop since early March 2020 based on levels at 3 pm Eastern Time.

Commodities

• Commodity prices soared as sanctions on Russia threatened to cause supply disruptions in oil, natural gas, industrial metals and grains
• U.S. crude futures posted their biggest weekly gain since April 2020, up 25.9%. U.S. crude settled up $8.01 at $115.668 a barrel, while Brent rose $7.65 to $118.11.
• Aluminum touched a fresh record high in London, heading to its biggest weekly gain on record amid fears of a squeeze on the metal from Russia. Nickel reached an 11-year high for similar reasons.
• Palladium prices rose above $3,000 per ounce for the first time since May 2021 as concerns over supply shortages from top producer Russia mounted and the war in Ukraine bolstered demand for safe-haven gold.
• U.S. gold futures settled 1.6% higher at $1,966.60 an ounce.

Currencies

• The euro tumbled below $1.10 for the first time in almost two years and hit a fresh seven-year low against the safe-haven Swiss franc as Russian forces seized the largest nuclear power plant in Europe and fighting raged elsewhere in Ukraine.
• Bitcoin was down around 6% at $39,461.

Next Week

Market will digest earnings reports from several companies including JD.com, Rivian, Dick’s Sporting Goods, Petco, WeWork, and more as well as economic data from across the world.