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The stock market rallied on Wednesday, albeit below session highs, after reports that Russia and Ukraine are making progress on a preliminary ceasefire plan.
Nasdaq (COMP.IND) +2.8%, S&P (SP500) +1.6% and Dow (DJI) +1.1% are up.
Eight of the 11 sectors of the S&P are higher, with consumer and financial at the top. Utilities and energy are the lowest, oil prices are down a bit, and money is at risk.
The Financial Times reported that both sides are moving forward on a 15-point plan in which Russia would withdraw and Ukraine would agree to neutrality and limits on its military forces.
Ukrainian President Volodymyr Zelensky previously called for additional sanctions and a no-fly zone in today’s video address to Congress.
Rates are stable ahead of an expected quarter-point hike from the FOMC. The 10-year Treasury yield remained unchanged at 2.16%.
“It’s not a pandemic where there was only one possible policy path,” said UBS chief economist Paul Donovan. “The Fed has two conflicting policy options with higher commodity prices.”
“If the Fed is worried about the wage-cost/price spiral, it will need to push growth below the trend. Then the risks of a recession will increase significantly. If the Fed is concerned about changes in demand that are slowing growth and raising unemployment, it will tighten more cautiously.”
On the data side, retail sales rose slightly less than expected in February.
“The headlines look disappointing, but upward revisions — core and non-automotive sales were revised up 1.0% and the benchmark rose +1.5% — were more than the shortfall of February consensus forecasts,” said Ian Shepherdson. from Pantheon Macro. .
“Stepping away from the noise, the first quarter is now trading at a rate of almost 12% yoy of the control measure – assuming no revisions to February data and unchanged sales per month – more than we previously expected. ,” he added. “In the third and fourth quarters of last year, benchmark sales rose by 2.8% and 6.2% respectively, so this is a clear acceleration. It probably cannot be sustainable, but in the meantime, a revision of growth forecasts should be expected GDP in the first quarter upwards.