All three indices recorded the highest weekly performance since November 2020, with oil prices soaring above $ 130 a barrel in early March last week. However, prices have risen as Russia’s bombing in Ukraine has intensified and the solution seems to remain unreachable. The weekend’s attack on Saudi Arabia’s oil facilities added further uncertainty to the energy market.
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Further pressure was put on the European Union as it considered whether to ban Russia’s oil. This is a move that will hit major Russian financial institutions directly, with oil sales accounting for 40% of the Russian government’s budget, according to the Russian Ministry of Finance, but blocking off from its largest energy supplier. To do.
Brent crude, the international oil benchmark, rose 7.7% on Monday, surpassing $ 116 per barrel. West Texas Intermediate crude, the US oil benchmark, rose 7%, slightly above $ 112 per barrel.
Meanwhile, the Moscow MOEX exchange was partially opened for the first time in three weeks after stocks endured the cruelest sold-outs in market history amid a rapid economic backlash from the Ukrainian invasion.
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The Bank of Russia announced on Monday that it would resume trading federal loan bonds a few days after the government paid foreign bondholders interest of $ 117 million, avoiding the first external debt defaults since 1918. Protecting stocks from the pain that foreign Russian-listed companies have experienced in the last few weeks in a horde of sanctions.
Wayne Wicker, Chief Investment Officer of Mission Square Retirement, said: “Although these exchanges are closed, investors holding positions in Russia estimate their fair value without the profit of the actual trading of securities traded exclusively on the Moscow Stock Exchange. I had to rely on. “
President Biden is heading to Europe this week for an emergency meeting between NATO and its allies as the war approaches a month. During the conflict, instability is increasing in the global market. Russia, one of the world’s largest producers of energy, has been nailed to the Ukrainian headline as it can disrupt the energy markets that can cause dangerous inflation. Even before the aggression, inflation had skyrocketed to its highest level since the 1980s.
Businesses and homes are facing increased costs at almost every step in their supply chain and every shelf in supermarkets. Rents are skyrocketing, as are the prices of used and new cars. The US average for a gallon of gas on Monday was $ 4.25, according to AAA data. This is a few cents down from recent highs, but still 72 cents higher than it was a month ago.
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Last week, the Fed announced its first rate hike since 2018 and is ready for some more rate hikes. Widely telegramed moves also lift markets as investors ensure investors are actively working to curb inflation and spur back to high-risk equities. Was useful.
But now traders may be taking a “more defensive stance,” said Chris Larkin, managing director of Morgan Stanley’s E-Trade.
“With this week’s Fed announcement and a fairly light economic calendar, the Ukrainian conflict could recede as a market driver in the coming days,” Larkin said.
“We will take the necessary steps to restore price stability,” he said. “Especially if we conclude that it is appropriate to act more aggressively by raising the federal funds rate by 25 basis points or more at one or more meetings, and then neutral. If we decide that we need to go beyond the general means and tighten to a more restrictive stance, we will do that too. “
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Still, Wall Street’s strong stock performance last week is evidence of the market’s underlying credibility and thirst for good news, despite many headwinds, from pandemics to supply chain crises to war collapses. Said Chief Investment Officer Ivan Fineses, an officer of Tigress Financial Partners.
“Even if analysts have significantly lowered their 2022 forecasts and stock price targets, they haven’t made a significant readjustment to their outlook,” Fineses said on Monday. “There’s still a strong bullish story. “.