Stocks rallied on Friday after Russia signaled it was open to talks with Ukraine.
In the midday trade, the
Dow Jones Industrial Average
increased by 585 points, or 1.8%. The index on Thursday briefly fell in correction, 10% below its all-time high. the
added 1.7%, with the
Russian spokesman Dmitry Peskov told reporters that Moscow may send a delegation to Belarus to speak with Ukrainian leaders.
On Thursday, major US equity indices reversed their heavy losses to end the day higher. The rally was led by tech stocks after the Nasdaq briefly entered bearish territory. Market participants recovered battered tech stocks, while other more economically sensitive or cyclical names did not recover as much. The rebound began when President Joe Biden took to the media and refused to announce sanctions on Russian oil exports. For now, Biden seems more interested in monitoring inflation and protecting the economy, said Kim Wallace, managing director and policy expert at 22VResearch.
“Yesterday it became clear that the harshest penalties would be avoided,” helping the market rally continue, wrote Dennis DeBusschere, founder of 22VResearch.
Certainly, Western countries could impose sanctions on Russian oil in the future if the war continues to drag on in Ukraine. This would mean a reduction in oil supply, a higher price and more inflation, which consumers have already faced. This threatens economic growth at a time when markets are already expecting central banks to raise interest rates to fight inflation.
On Friday, the price of WTI crude oil was down 1.7% to less than $92 a barrel. Buyers stepped in when the price dipped into the $90s a barrel to reflect sanctions risks. Oi is still up more than 20% for the year.
Elsewhere, the Personal Consumption Expenditure (PCE) price index gained 6.1% year-over-year in January, the biggest gain since 1982. That may sound scary, but markets have already understood that recent inflation has prompted the Federal Reserve to plan several interest rate hikes this year. Equities could still react negatively if the Fed indicates in its interest rate decision in mid-March that it will raise rates more times than currently expected.
A bright spot on the economic data front on Friday: consumer spending in January rose 2.1% month-over-month, better than the expected 1.5% forecast. At least for now, consumers are not cutting spending much given high inflation.
Markets fear that will change.
Overseas stocks took a cue from Wall Street to rebound on Friday from heavy losses on Thursday, but updates on Ukraine remained in focus.
increased by 3.9%, and that of Frankfurt
climbed 3.5%; both indices recorded losses of 3% to 4% in the previous session. In Asia, Tokyo
ended the day with 2% gains after losing 1.7% on the last day.
“European markets will continue to have the strongest propensity for bad news from Eastern Europe,” said Jeffrey Halley, analyst at brokerage Oanda. “The ‘Ukrainian peak’ rally in the US and Asia is unlikely to have the same magnitude due to geography, but some small gains are expected.”
Cryptocurrencies have mostly rebounded after being hit hard by the sell-off in risk-sensitive assets.
the leading digital asset, is up nearly 10% in the past 24 hours and is nearing $39,000, according to data from CoinDesk. It was trading as low as around $34,500 on Thursday.
Here are five stocks moving on Friday:
(ticker: SQ), formerly known as Square, saw its stock jump 25% after the company reported earnings of 27 cents per share, beating estimates of 23 cents per share on sales of 4, $4 billion, above expectations of $4 billion.
(ETSY) gained 12% after the company reported earnings of $1.11 per share, beating estimates of 77 cents per share, on sales of $717 million, above expectations of $685 million. dollars.
(FL) fell 36% after the company said it expects same-store sales to fall 8% to 10% this year.
(BYND) fell 7.7% after the company reported a loss of 34 cents per share, narrower than estimates for a loss of 70 cents per share on sales of $100.7 million, in below expectations by $101 million.
(TSLA) gained 0.5% after being upgraded from Neutral to Outperform at Daiwa Securities.