Our live coverage has ended for the day. Read more about Russia’s invasion of Ukraine here.
US stocks rallied for a second straight day after Russia reportedly agreed to hold talks with Ukraine. Better-than-expected jumps in personal spending and durable goods orders also helped lift market sentiment.
The Dow had its best day of the year and managed to finish the holiday-shortened trading week flat while the S&P 500 and Nasdaq Composite both ended the week with gains.?
As stocks settle after the trading day, levels might still change slightly.
One is the loneliest number that you’ll ever do. Just ask Disney (DIS) shareholders.
The House of Mouse was the only Dow stock trading in red Friday. Shares were down a little less than 1%. Meanwhile, a dozen of the Dow’s 30 components were up at least 3%.
Disney shares have fallen about 4% in 2022. That’s actually less than the Dow’s drop of more than 6%, so it’s not all bad news. And Disney is holding up much better than its main streaming rival. Netflix (NFLX) has plunged more than 35% in 2022.
The Dow’s remarkable rebound in the past day and a half briefly pushed the 30 industrials back into positive territory for the week.
With a nearly 900-point gain in mid-afternoon trading, the Dow has surged more than 1,800 points, or 5.6%, from its lows on Thursday morning after Russia’s invasion of Ukraine sent Wall Street and global markets into a tailspin. (Stocks pulled back from their highs, though, with the Dow up a “mere” 800 points just two hours before Thursday’s closing bell.)
Still, the change in sentiment is nothing short of head-spinning.
The plunge in Russia’s stock market Thursday has hit Russian billionaires hard. Bloomberg reported that some of the country’s wealthiest individuals collectively lost $39 billion as a result of the market upheaval in the wake of Russia’s invasion of Ukraine.
Oligarchs with ties to commodities were hit the hardest. Lukoil chairman Vagit Alekperov lost more than $6 billion, according to the Bloomberg Billionaires Index. (No need for him to cry in his vodka – he’s still worth $13 billion.)
Alexey Mordashov, chairman of steelmaker Severstal, lost $4.2 billion on Thursday but is his net worth is now $23 billion. And the country’s wealthiest individual, Norilsk Nickel president Vladimir Potanin, lost $3 billion. His net worth is about $26 billion.
Hope springs eternal on Wall Street. Stocks soared Friday, building on Thursday’s huge late-day rally that lifted stocks into positive territory that day.
Investors are optimistic because of reports that Russia plans to send representatives to the Belarusian city of Minsk to have talks with Ukraine following Thursday’s invasion.
The Dow was up nearly 700 points, or 2%, in midday trading. It’s shaping up to be the best day of 2022 for the Dow. Only one Dow stock — Home Depot (HD) — was trading lower.
The Nasdaq and S&P 500 were both surging too, gaining 1.3% and 1.9% respectively. Banks, basic materials and healthcare companies led the rally. All 11 sectors in the S&P 500 were in green. The S&P 500 and Nasdaq are now slightly higher for the week while the Dow is nursing a small loss.
Investors were also pleased by strong earnings reports from Etsy (ETSY), Monster Beverage (MNST) and Square owner Block (SQ). Bigger-than-expected jumps in personal spending and durable goods orders also lifted sentiment.
The International Energy Agency held an emergency meeting Friday to strategize a response to Russia’s invasion of Ukraine.
The IEA’s 31 member countries discussed how they can “continue to play a stabilizing role,” the group said in a statement following the unscheduled meeting.?
The attack on Ukraine set off significant turbulence in energy markets amid fears of a disruption in oil or natural gas supply from Russia, the world’s No. 2 producer of each fossil fuel. President Joe Biden has said US officials are discussing with other nations another coordinated release of oil from emergency reserves.
“We reviewed how the Russian invasion has increased concerns among oil market participants against the backdrop of already tight global markets and heightened price volatility,” IEA Executive Director Fatih Birol said. “We discussed options the IEA could take over the coming days and weeks.”
On the natural gas front, the IEA warned that “any disruption to Russian supplies via Ukraine would put further pressure on Europe, with flow on effects to the rest of the world.”
Birol said the IEA discussed the possibility of holding a minister-level meeting and agreed to closely monitor developments and to “continue to act in solidarity to ensure global energy security.”
Democrats in Congress are calling for the White House to take new steps to blunt the impact of soaring gasoline prices in the wake of Russia’s attack on Ukraine.
“As Russia’s invasion of Ukraine continues to cause volatility in the global oil market, we are writing to urge you to consider using all of the tools at your disposal to insulate Americans from rising gasoline prices,” the lawmakers wrote in a letter to President Biden dated Thursday.
The letter, signed by nine Senators and one Congressman, specifically cited an additional release from the Strategic Petroleum Reserve. Biden said Thursday the United States stands ready to release more oil from America’s oil stockpile, if necessary.
The lawmakers also encouraged the use of “diplomatic pressure” to persuade global oil producers to boost production and “restrictions on petroleum exports unless they will advance our national security goals and lower prices for consumers.”
The national average price for regular gasoline climbed to $3.57 a gallon on Friday, according to AAA. That’s up by about 3 cents in just a day and 23 cents in a month. Gasoline prices move with a lag to oil.?
Inflation may be eating into consumers’ bank accounts, but Americans apparently remain willing to spend on handmade gifts and high-caffeine beverages.
Shares of Etsy (ETSY), the popular e-commerce site for arts and crafts, surged 11% Friday thanks to strong earnings and sales that topped Wall Street’s forecasts. That made Etsy the top gainer in the S&P 500 Friday. The stock is still down 35% this year.
Monster Beverage (MNST) was another big S&P 500 winner Friday, with its stock up more than 6% after reporting revenue that beat analysts’ estimates. Monster has fallen about 10% this year, but its shares have gotten a boost lately from takeover chatter.
Bloomberg reported last week that Monster is in merger talks with Corona beer owner Constellation Brands (STZ) about a deal that could be valued at more than $90 billion.
Foot Locker’s stock tumbled 35% Friday after the shoe store predicted sales and profit would fall sharply this year. The culprit:?Nike.
The retailer, which didn’t explicitly mention Nike in its earnings report, said Friday that no single supplier is expected to account for more than about 60% of its total purchases for fiscal 2022. Nike accounted for 75% of its sales in 2020 according to?Foot Locker’s?(FL)?most recent annual report.
Foot Locker, whose suppliers also include Adidas and Puma, projected that this year’s sales at stores open for at least a year would decline by 8% to 10%. Shares are down about 40% for the year.
Nike?(NKE), Foot Locker’s biggest supplier, is ramping up its focus on its direct-to-consumer business. Last year, Nike said it was shifting to selling more of its products through its own shops, websites, mobile apps and select retailers, cutting ties with many stores.
It’s hip to be Square! Oh, wait, we meant Block. Shares of Block (SQ), the Jack Dorsey-led fintech giant that used to be named Square, surged more than 20% Friday after the company reported strong earnings and a bullish outlook.
Block said that growth in its mobile payments service Cash App, which also lets people buy and sell stocks and bitcoin, helped boost its results. Cash App ended last year with more than 44 million active accounts, an increase of 22% from 2020.
Block certainly could use the good news. Shares are down nearly 30% so far this year as, the plunge in bitcoin and crypto prices has hurt the company. That’s also been a problem for Coinbase (COIN). Shares of that crypto trading exchange fell 3% Friday after it reported earnings and issued weak guidance.
But Block has also been hurt by concerns about a crackdown in Washington on the so-called “buy now, pay later” business. Block is a major player in the BNPL market following its acquisition last year of Afterpay. Shares of Block rival PayPal (PYPL) and BNPL leader Affirm (AFRM) have plummeted this year too due to worries about calls from Congress to regulate the industry more heavily.
US stocks staged a remarkable turnaround in premarket trading and opened higher Friday morning following reports that Russia may be willing to send a delegation to Minsk to hold talks with Ukraine. The market also rallied Thursday following a massive drop at the open as bargain-hunting investors scooped up tech and consumer stocks.
The West has not gone after Russian oil. But nervous traders have decided they still don’t want to touch it, jolting the?global energy market?at a delicate moment.
The main grade of oil that Russia exports into Europe is now being offered for sale at a hefty discount, signaling a sharp drop in demand, according to analysts at Independent Commodity Intelligence Services.
They calculated that a barrel of Urals crude is trading $10.60 below the price of benchmark Brent. That’s the biggest gap on record.
If traders continue to shun Russian oil, that could drive up prices around the world as competition heats up to secure barrels of crude from other sources.
Yet another key measure of inflation ticked higher at the start of the year, rising at its fastest pace since February 1982.
The price index tracking consumer spending increased by 6.1% between January 2021 and January 2022, according to new data from the?Commerce Department?released Friday.
Stripping out food and energy costs, which tend to be more volatile, prices rose 5.2% over the same period. That was the fastest advance since April 1983.
For the month of January, prices rose 0.6%, or 0.5% excluding energy and food, in line with economists’ predictions but at a faster rate than in the month prior.
The personal consumption expenditure price index, or PCE, is the Federal Reserve’s preferred measure of inflation.
Oil prices are hovering around the century mark following Russia’s attack on Ukraine. But one market strategist thinks crude prices have to rise substantially above $100 a barrel before consumers start to truly worry and begin to spend less.
“If oil gets to around $130, people will notice,” said Dec Mullarkey, managing director of investment strategy and asset allocation at SLC Management.
Mullarkey said he’s not concerned yet about a super-spike in crude prices similar to what happened during the 1970s oil embargo.
But he conceded that the recent run-up in oil and gas prices could be problematic if they pick up steam.
“Consumers still have a lot of savings and the labor market is good. So there is a strong base,” Mullarkey said. “But consumer confidence could eventually take a hit.”
Maybe stocks won’t plunge at the opening bell Friday after all?
Market futures on Wall Street reversed course about an hour and a half before the beginning of trading on reports suggesting that Russia may be willing to talk with Ukraine about Thursday’s invasion. China has reportedly suggested that Vladimir Putin open negotiations, and Russia’s state-owned news agency RIA-Novosti is reporting that Russia is ready to send a delegation to Minsk.
“Following [Ukrainian President Volodymyr] Zelensky’s proposal to discuss the neutral status of Ukraine, [Russian President Vladimir] Putin can send representatives of the [Russian] Ministry of Defense, the Foreign Ministry and his administration to negotiations with the Ukrainian delegation,” said Kremlin spokesman Dmitry Peskov according to RIA-Novosti.
Dow futures, which were pointing to a triple-digit point drop earlier Friday, are now up 40 points. S&P 500 and Nasdaq futures are slightly higher too.
The US and Europe imposed a series of sanctions against Russia following Vladimir Putin’s decision to attack Ukraine. Even though the West held back on some of the potentially most severe sanctions that could have really hurt Russian banks and the Russian people, investors are still nervous about what’s next.
The biggest concern is what Putin might do to retaliate.
“We…see potential volatility caused by Russia using its cyberattack network,” said Nuveen’s Global Investment Committee in a report. “This growing area of non-military attack should remain a significant risk going forward, and may expand to include areas such as financial services, which is likely to cause ongoing uncertainty.”
There’s also the risk that the sanctions lead to even more inflation…the last thing that the US and other developed nations need right now. Consumers and businesses are already feeling the pinch.
“Upward pressure on commodities also exists, as Russia is a major supplier of nickel (EV batteries and stainless steel), palladium (catalytic converters), titanium (modern aircraft and military applications) and many other esoteric periodic table elements,” said Janus Henderson emerging market portfolio managers Daniel J. Gra?a, CFA and Jennifer James, in a blog post.
The Janus Henderson managers added that “the duration of this commodity move will depend on the severity of sanctions imposed by the West and the reaction of Russia.” But the net result? “Inflation is likely to move higher, which is effectively a tax on consumers.”
US stock futures fell after Russia began its siege of Kyiv. Investors once again fled stocks for safer havens, including bonds.
The 10-year Treasury yield fell to 1.96%.
But some other safe-havens fell, including US oil, which sank to $92.67 a barrel. Brent crude also remained below $100 a barrel.
Gold remained flat at just over $1,900 a troy ounce.
Dow futures were down 180 points or 0.5%.
S&P 500 futures fell 0.5%.
Nasdaq futures were 0.3% lower.
Russia’s?invasion of Ukraine?has sent?oil futures above $100 a barrel?for the first time since 2014 and will probably bring?$4-a-gallon gasoline?to much of the United States. But it won’t be a major drag on US economic growth.
Economists project that at most the nation’s?gross domestic product, the broadest measure of its economic activity, will have a few tenths of a percentage point shaved off its growth rate. With the economy growing very strong — GDP had its?best growth since 1984?last year — America is expected to weather those higher prices just fine, even if drivers are grumbling.
The positives and negatives for the US economy from an oil price hike come close to balancing each other out, noted Paul Ashworth, chief North American economist for Capital Economics.
The West has announced a?barrage of tough new sanctions?aimed at cutting off Russia’s banks from the global financial system and depriving the country of vital technology. Yet a punishing financial weapon is being kept in reserve.
The United States and the European Union held back from cutting Russia off from?SWIFT, a high security messaging network that connects thousands of financial institutions around the world, after failing to agree on a step that some have called the “nuclear option.” It would damage Russia but also big economies in Europe.
Ukraine appealed for Russia to be removed from SWIFT after President?Vladimir Putin?ordered an invasion on Thursday. The call from Kyiv was backed by Lithuania, Estonia, Latvia and the United Kingdom but other European countries resisted.
US President Joe Biden told reporters on Thursday that depriving Russia of access to SWIFT is “always an option.” But, he added, “right now, that’s not the position that the rest of Europe wishes to take.”
American Petroleum Institute CEO Mike Sommers insisted on Thursday that US oil companies would not seek to capitalize on Russia’s invasion of Ukraine.
“Our companies would never take advantage of this kind of situation,” Sommers, who leads the most powerful US energy trade group, told CNN in a phone interview.
Earlier on Thursday, Biden delivered a warning to the oil industry amid soaring prices.
“American oil and gas companies should not – should not exploit this moment to hike their prices to raise profits,” Biden said in prepared remarks.