Stock futures headed for a lower open Friday morning as investors awaited a key update on the labor market’s recovery and continued to monitor for global economic fallout from Russia’s war in Ukraine.
Contracts on the S&P 500 fell to extend declines from Thursday. Treasury yields pulled back further as traders piled into safe havens including bonds and gold, and the benchmark 10-year yield dropped to below 1.8{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}. The risk-off tone Friday morning came amid news that Russia had seized Europe’s largest nuclear power plant in Ukraine, after Russian shelling set fire to the facility earlier.
A fresh set of economic data due for release Friday morning is expected to reaffirm to investors that the U.S. economy has recovered sufficiently to allow monetary policymakers to ease their crisis-era supports. The Labor Department’s February jobs report is expected to show a fourteenth consecutive month of payroll gains, with jobs rising by more than 400,000 and the unemployment rate edging lower to 3.9{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} — or the lowest since February 2020 before the pandemic. Such a result would mirror the much better-than-expected private payrolls data out from ADP earlier this week.
And already, Fed officials have declared victory on fulfilling their employment mandate for the economy. In congressional testimony this week, Fed Chair Jerome Powell said that most Federal Open Market Committee (FOMC) members would agree that the labor market in the U.S. is now at a level consistent with maximum employment.
And even ahead of the February jobs report, Powell said he would back a 25 basis point interest rate hike at the Fed’s March meeting, putting to rest speculation that the central bank might press ahead with a more aggressive 50-basis point hike to jump-start its efforts to bring down inflation. But persistent price increases have left open the question of how aggressively the Fed will need to tighten monetary policy over the rest of the year.
Inflationary concerns have only compounded as crude oil prices spiked to hover at multi-year highs, with both West Texas intermediate and Brent crude oil prices rising more than 40{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} for the year-to-date and holding well over $100 per barrel. But for monetary policymakers, these concerns have had to be weighed against the uncertainty now generated by the crisis in Ukraine.
“The recent action over the last week, given the combination of the Russia-Ukraine situation but also the continued prints from inflation, have moved expectations down within the market to closer to five hikes, maybe even lower,” Matt Kishlansky, GenTrust Wealth Management Principal, told Yahoo Finance Live. “So I think the Fed needs to signal to that effect that they think that that’s really where they’re going to be.”
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7:22 a.m. ET: Stocks head for lower open
Here’s where stocks were trading Friday morning:
S&P 500 (^GSPC): -42.5 (-0.96{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 4,317.50
Dow (^DJI): -322 (-0.95{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 33,416.00
Nasdaq (^IXIC): -126.25 (-0.9{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 13,904.25
Crude (CL=F): +$2.43 (+2.26{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $110.10 a barrel
Gold (GC=F): +$15.20 (+0.79{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,951.10 per ounce
10-year Treasury (^TNX): -6.5 bps to yield 1.779{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
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6:13 p.m. ET Thursday: Stock futures rise
Here were the main moves in markets Thursday evening:
S&P 500 futures (ES=F): +6.5 points (+0.15{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), to 4,365.75
Dow futures (YM=F): +54 points (+0.16{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), to 33,792.00
Nasdaq futures (NQ=F): +31.25 points (+0.22{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 14,061.75
A trader works at the New York Stock Exchange in New York, the United States, Feb. 28, 2022. U.S. stocks closed mixed on Monday as investor eyed updates regarding the Russia-Ukraine conflict.The Dow Jones Industrial Average fell 166.15 points, or 0.49 percent, to 33,892.60. The S&P 500 decreased 10.71 points, or 0.24 percent, to 4,373.94. The Nasdaq Composite Index rose 56.78 points, or 0.41 percent, to 13,751.40. (Allie Joseph/NYSE/Handout via Xinhua)
The White Property unveiled measures to isolate Russia from the world wide money, tech and trade process.
The United States said that it is imposing ‘severe’ economic sanctions on Russia in response to President Vladimir Putin’s attack on Ukraine, aimed at crippling the Russian economic system, its monetary establishments and its entry to technological innovation.
US President Joe Biden at the White Home Thursday stated: ” Putin chose this war. And now he and his place will bear the penalties.”
Russia’s inventory marketplace tumbled to its least expensive stage in four and a 50 {1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} decades on Thursday, and its currency, the rouble, arrived at a document reduced vs . the buck.
Now, the even stricter actions intention to squeeze Russia’s financial state, stifle its progress, maximize borrowing costs, elevate inflation and intensify cash outflows.
The Biden administration stated in a statement Thursday afternoon that sanctions goal all 10 of Russia’s greatest economical establishments and impose export handle measures that will more than halve Russia’s higher-tech imports.
The moves consist of cutting off Russia’s biggest financial institution from the US monetary program and imposing sanctions on Russia’s 2nd-largest financial institution, and freezing any of its property touching the US monetary program.
The sanctions on Russia’s best economical entities include the imposition of “full blocking and correspondent and payable-as a result of account sanctions, and debt and fairness limitations, on institutions holding almost 80 per cent of Russian banking sector assets”, the White House explained.
“The scale of Putin’s aggression and the risk it poses to the international buy call for a resolute reaction, and we will continue imposing serious fees if he does not change study course,” the Biden administration included in a statement.
The US applauded Australia, Canada, the European Union, Japan, and the United Kingdom for possessing agreed to consider “similarly forceful” actions from Russia.
Here’s a record of the US sanctions:
Severing the connection to the US monetary method for Russia’s major fiscal lender, Sberbank, which include 25 subsidiaries, by imposing actions that slice off Sberbank’s obtain to transactions designed in the dollar. Sberbank retains nearly a person-3rd of Russia’s banking sector assets.
Sanctions on Russia’s 2nd-major fiscal institution, VTB Lender (VTB), and its subsidiaries, freezing assets touching the US economical method and banning US folks from doing company with them. Intensely exposed to the US and western fiscal programs, VTB retains almost just one-fifth of Russia’s banking sector assets.
Similar full-blocking sanctions on Bank Otkritie, Sovcombank OJSC, and Novikombank and dozens of its subsidiaries, with measures freezing any of these institutions’ assets touching the US economic technique and also prohibiting Us citizens from performing company with them.
New financial debt and equity restrictions on 13 significant Russian monetary entities, like limitations on all transactions in, provision of financing for, and other dealings in new credit card debt of larger than 14 days maturity and new fairness issued by 13 Russian state-owned enterprises. Sberbank, AlfaBank, Credit rating Financial institution of Moscow, Gazprombank, Russian Agricultural Lender, Gazprom, Gazprom Neft, Transneft, Rostelecom, RusHydro, Alrosa, Sovcomflot, and Russian Railways are on the list. With estimated belongings of about $1.4 trillion, these entities will be not able to elevate funds via the US market.
Extra whole-blocking sanctions on Russian elites and their household associates and persons “who have enriched themselves at the expenditure of the Russian state”. Heads of Russia’s premier economical institutions and individuals liable for offering the methods necessary to help the invasion of Ukraine are also focused.
Two dozen Belarusian persons and entities were also sanctioned for supporting the assault on Ukraine. Two popular Belarusian state-owned banks, nine defence firms, and seven folks are among individuals affected.
Russia’s armed service and defence ministry limited from shopping for nearly all US merchandise and items produced in international nations making use of specified US-origin software, technology, or equipment.
Defence, aviation, and maritime technological know-how matter to Russia-wide limitations aimed at choking off Moscow’s import of tech products. That also involves a Russia-vast denial of exports of some technology. The US sanctions will also impose Russia-broad restrictions on some US systems manufactured in other countries like semiconductors, encryption safety, lasers, sensors, navigation, avionics and maritime systems.
Licensing exemptions for countries that adopt export restrictions on Russia will be executed, reducing US licensing requirements for goods made in their nations around the world. The EU, Australia, Japan, Canada, New Zealand and the Uk have presently communicated their options for parallel steps.
Stocks extended declines Friday to close a second straight week in negative territory with geopolitical tensions intensifying to contribute to a further risk-off tone in markets.
The S&P 500 fell 0.71{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to 4,348.97, building on a 2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} loss in the previous session, while the Dow Jones index closed down 0.68{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to 34,079.12 after erasing 1.8{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} Thursday for its worst day in nearly three months. The Dow also closed at its lowest level since September. The Nasdaq Composite shed 1.23{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to 13,548.07 — its lowest level since January. Meanwhile, the CBOE Volatility Index (VIX), or “fear gauge,” spiked back to hover near 28 Friday.
The souring in sentiment came after U.S. officials said they estimated Russia had built up around 190,000 military personnel near Ukraine, raising the specter of a near-term attack. And this came a day after President Joe Biden told reporters on Thursday that the threat of a Russian invasion of Ukraine was “very high” in the coming days. Crude oil prices fell Friday morning to pause a recent run-up even as Russia-Ukraine tensions resurged.
“The two things we’re most concerned about right now in terms of headwinds for the market and causes for volatility, are clearly tensions with Russia-Ukraine … and then clearly, our concern over not just inflation but what the monetary policy response to that inflation is going to be,” Art Hogan, National chief market strategist, told Yahoo Finance Live on Thursday. “And those headlines have changed quite a bit too.”
“We’ve gone from thinking the Fed would be very, very deliberate in their actions starting in March and telegraph everything … to having some outliers on the committee talking about being very aggressive, a lot more aggressive than what’s priced into the market,” he added. “Every day the story changes a bit.”
Treasury yields fell further after dropping across the curve on Thursday, with the 10-year yield holding back below 2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}. This came as markets priced in a lower probability of a front-loaded 50 basis-point interest rate hike from the Federal Reserve in March, with investors looking past hawkish commentary from St. Louis Fed President James Bullard calling for a more aggressive path on interest rates.
Other strategists also underscored the dual concerns around Russia and Ukraine and on the Fed for markets in the near-term.
“Really, it’s about Russia and Ukraine, and it’s about the Fed. And on the geopolitical side, I think the challenge for investors is that geopolitical risk is just really hard to weigh,” James Liu, Clearnomics founder and CEO, told Yahoo Finance Live on Thursday. “Our view is that we’re not yet in a situation where it makes sense to make any real portfolio moves based on this. I mean, first of all, diplomatic channels are still open, so the situation is still evolving on a regular basis.”
“The challenge is that even if the worst case scenario were to happen, it’s hard to gauge exactly what the impact long-term would be on the markets,” he added.
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4:00 p.m. ET: US stocks mark second straight losing week amid Russia-Ukraine turmoil
Here were the main moves in markets at the end of Friday’s session:
S&P 500 (^GSPC): -31.29 (-0.71{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 4,348.97
Dow (^DJI): -232.91 (-0.68{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 34,079.12
Nasdaq (^IXIC): -168.65 (-1.23{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 13,548.07
Crude (CL=F): -$0.18 (-0.20{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $91.58 a barrel
Gold (GC=F): -$4.70 (-0.25{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,897.30 per ounce
10-year Treasury (^TNX): -4 bps to yield 1.9320{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
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10:52 a.m. ET: ‘Underlying inflation appears to be well-anchored’: Evans
Chicago Fed President Charles Evans suggested on Friday that absent pandemic and supply chain disruptions, underlying price pressures were still consistent with the Federal Reserve’s targets and did not warrant an extreme policy response.
“By my reading underlying inflation appears to still be well anchored at levels consistent with the Fed’s average 2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} objective,” Evans said during a University of Chicago Booth School of Business conference on Friday.
“I see our current policy situation as likely requiring less ultimate financial restrictiveness compared with past episodes and posing a smaller risk” to economic activity, he added.
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10:02 a.m. ET: Existing home sales post surprise jump in January, inventory sinks to record low
Sales of previously owned homes in the U.S. posted an unexpected jump at the beginning of 2022, reversing declines from the prior month.
Existing home sales rose at a seasonally adjusted annualized rate of 6.5 million in January, according to the National Association of Realtors (NAR). This represented a 6.7{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} month-on-month increase, following a 3.8{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} drop in December. Still, sales were down 2.3{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} from the same month last year, when low interest rates stoked demand for purchases.
Housing inventory slid by 16.5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} over last year to 860,000, marking a record low since NAR began tracking the data in 1999. Tight supplies pushed prices higher, and the median existing-home price rose 15.4{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} over last year to $350,300.
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10:46 a.m. ET: ‘Underlying inflation appears to still be well-anchored: Evans
Chicago Federal Reserve President Charles Evans suggested Friday that the Federal Reserve’s current monetary policy setting was “wrong-footed against the current, sharp increases in inflation,” and suggested price pressures would subside without extreme moves by the Fed.
“I see our current policy situation as likely requiring less ultimate financial restrictiveness compared with past episodes and posing a smaller risk” to economic growth, Evans said during a University of Chicago Booth School of Business conference. He noted that in absence of pandemic and supply chain impacts, “underlying inflation appears to still be well-anchored at levels consistent with the Fed’s average 2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} objective.”
Here’s where markets were trading shortly after the opening bell:
S&P 500 (^GSPC): +4.64 (+0.11{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 4,384.90
Dow (^DJI): -43.35 (-0.16{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 34,258.30
Nasdaq (^IXIC): +23.65 (+0.17{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 13,740.37
Crude (CL=F): -$2.53 (-2.76{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $89.23 a barrel
Gold (GC=F): -$3.20 (-0.17{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,898.80 per ounce
10-year Treasury (^TNX): -3.2 bps to yield 1.942{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
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8:50 a.m. ET: Stocks turn negative as officials signal Russian military build near Ukraine
Stock futures erased earlier gains to trade in negative territory with just over 30 minutes until the opening bell.
Contracts on each of the S&P 500, Dow and Nasdaq turned lower. Investors turned into safe haven assets, and Treasury yields fell as prices were bid higher. The Vix spiked back above 28 after falling below 27 earlier Friday morning.
News that Russia had amassed some 190,000 military personnel near Ukraine contributed to the decline, erasing earlier optimism that diplomatic talks would lead to a deescalation of the tensions in the region. Earlier, the U.S. State Department had said Russian Foreign Minister Sergei Lavrov and U.S. Secretary of State Antony Blinken would meet next week.
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7:24 a.m. ET Friday: Stock futures point to a higher open
Here’s where markets were trading Friday morning:
S&P 500 futures (ES=F): +21 points (+0.48{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), to 4,395.50
Dow futures (YM=F): +124.00 points (+0.36{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), to 34,355.00
Nasdaq futures (NQ=F): +91 points (+0.64{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 14,255.75
Crude (CL=F): -$1.92 (-2.09{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $89.84 a barrel
Gold (GC=F): -$9.10 (-0.48{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,892.90 per ounce
10-year Treasury (^TNX): -0.2 bps to yield 1.972{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
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6:10 p.m. ET Thursday: Stock futures extend declines after rout
Here were the main moves in markets Thursday evening:
S&P 500 futures (ES=F): -5.25 points (-0.12{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), to 4,369.25
Dow futures (YM=F): -24 points (-0.07{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), to 34,207.00
Nasdaq futures (NQ=F): -24.75 points (-0.17{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 14,140.00
Photo by: NDZ/STAR MAX/IPx 2022 2/11/22 People walk past the New York Stock Exchange (NYSE) on Wall Street on February 11, 2022 in New York.
