“Russia’s magnitude of action will be demonstrated over the next few decades, marking a turning point in geopolitics, macroeconomic trends and the global order of capital markets.”
It was Larry Fink (-0.13%), CEO of BlackRock BLK, in an annual letter to shareholders issued Thursday.And in us Call todayHe closed the door to decades of global economic ties.
“I believe in the benefits of globalization and the power of global capital markets in the long run,” said the head of the world’s largest asset management company. “But Russia’s invasion of Ukraine has put an end to the globalization it has experienced over the last three decades.”
The disconnect between people, countries and businesses got off to a good start from a two-year pandemic. “It made many communities and people feel isolated and inward-looking. I believe this exacerbated the polarization and radical behavior seen throughout society today.” He said.
And now, with Russia’s attacks on its neighbors and its separation from the global economy, companies and governments around the world will “reassess their dependencies and reanalyze their manufacturing and assembly footprint, which is COVID. Has already let a lot of people do it, “he said.
While Russia’s reliance on energy is in the limelight, businesses and governments may also bring onshore or domestic businesses that could benefit Mexico, Brazil, the United States, or Southeast Asia.
And that means higher costs and margin pressures come first. “Today’s corporate and consumer balance sheets are strong and provide a cushion to overcome these challenges, but a major supply chain turnaround is essentially inflation,” Fink said. Says.
Also, the emphasis on globalization was Howard Marks, the founder of Oaktree Capital Management. “It’s not the cheapest, easiest, and most environmentally friendly source, and probably the premium will be higher than the safest and most reliable,” he said. As globalization boosts global GDP, it can impact investors, but it can also boost employment in domestic manufacturing.
Fink pointed out a few more points, including the potential for the war in Ukraine to accelerate digital currencies as countries rethink their reliance on traditional currencies. “A carefully designed global digital payment system can enhance payments for international transactions while reducing the risk of money laundering and corruption,” he said.
Short-term progress towards net zero is facing a setback in the turmoil, but a global shift to green energy could be boosted. “Higher energy prices also significantly reduce the green premium of clean technology and enable renewable energy,” he said.
Buzz
President Joe Biden is in talks with NATO and its European allies, and Russia’s sanctions are expected to increase further. Ukrainian President Volodymyr Zelensky called on citizens around the world to show support for his country on Thursday, alleging that he had destroyed a Russian ship as the fighting continued.
The Russian stock market rose on the first day of trading in a few weeks, but under fairly difficult conditions, only 33 companies were trading and there were no sales by foreigners or shortsellers.
North Korea launched a ballistic missile test claimed by Japan toward the sea.
Chief executive officers of 10 airlines, including Delta DAL (+ 0.40%) and American AAL (+ 0.56%), are asking Biden to end pandemic travel precautions. That’s because the World Health Organization has warned that COVID vaccination has stopped since the outbreak of the war in Ukraine.
Uber UBER, + 1.75% share, jumps to reports that ride-sharing companies are adding all New York taxis to the app.
Nikola NKLA, after confirming the production of electric trucks late Wednesday, + 8.21% inventories soared towards a two-and-a-half-month high.
Distribution app company Instacart is expanding its software offerings to grocery stores that want to compete with Amazon AMZN while Wall Street is waiting for an IPO (-1.85%).
Spotify SPOT, -2.61% inventories have risen after the streaming music provider announced an alternative in-app payment method transaction with Alphabet’s GOOGL, -0.09% Google.
While orders for consumer durables have fallen more than expected, weekly unemployed billing has fallen to its lowest level since 1969. The manufacturing and service purchasing manager index will continue. We will also be contacted by Fed President Neel Kashkari, February Governor Christopher Waller, and Atlanta Fed President Raphael Bostic.
market
Stocks DJIA, + 0.45% SPX, + 0.39% COMP, -0.05% are up, and oil CL00, -1.99% are down. Gold GC00, + 1.14%, dollar DXY, + 0.25% have also risen. Bond TMUBMUSD10Y, 2.350% yield is also high.
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