(Bloomberg) — Financial markets started the week with modest moves in assets as investors weighed in on the latest comments and developments from the central bank in Ukraine.
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Tech stocks propelled gains in U.S. stocks, buoyed by Twitter Inc. The social media company jumped as much as 31% after Tesla Inc. Chief Executive Elon Musk took a 9.2% stake in the company. business. Starbucks Corp. declined after founder Howard Schultz called off a share buyback plan. Meanwhile, US-listed Chinese stocks such as Baidu Inc. and Tencent Holdings Ltd. rose after China removed a key hurdle to allow the US full access to audits.
“As the first quarter begins to recede in the rearview mirror, investors will be focusing on the early tranche of first quarter S&P 500 results this week ahead of the unofficial start of earnings season,” wrote John Stoltzfus, chief investment strategist at Oppenheimer.
The second quarter started slowly, with investors awaiting the Federal Reserve meeting minutes on Wednesday and the start of corporate earnings season next week. The 10-year Treasury yield rose and the dollar strengthened against its peers. WTI crude oil rose above $103 a barrel as traders weighed the Covid outbreak in China and moves to tap into strategic reserves.
The Stoxx Europe 600 Index fluctuated before closing higher. Consumer discretionary stocks helped lead gains, with Delivery Hero SE jumping after an earnings forecast. Healthcare stocks also rose as Roche Holding AG rose after US regulators granted priority review for its Covid-19 drug Roactemra.
Russian and Ukrainian negotiators will resume video talks on Monday, after the European Union condemned Russia for atrocities committed by its military in several Ukrainian cities and President Joe Biden said Vladimir Putin could face trial for war crimes. . That is dimming hopes of an imminent breakthrough in peace talks.
“We remain hopeful that the talks will continue to move towards a ceasefire and the withdrawal of Russian troops, but if the process so far is valid, that may not happen any time soon,” said Craig Erlam, senior market analyst. of Oanda Europe Ltd. “While progress has been positive for risk assets so far, they remain vulnerable to setbacks in the talks that continue to take place in the context of ongoing attacks.”
The Treasury yield curve shows more warnings that economic growth will slow as the Federal Reserve raises rates to rein in inflation fueled in part by commodities. The US two-year yield has surpassed the 30-year yield for the first time since 2007, joining investments elsewhere on the curve. Fed minutes later this week will shape views on the odds of a half percentage point rate hike in May and provide key details on how the central bank will reduce its balance sheet.
“Global equity investors started 2022 with the main concern of aggressive central banks. However, the brutal war between Russia and Ukraine dealt the final blow that sent many global indices close to bear market territory,” Megan Horneman, chief investment officer at Verdence Capital Advisors, said in a note. “Bond investors felt the pain of the end of the Fed’s accommodative monetary policy as the Fed raised rates for the first time since 2018. Equity investors were hit with many indices in contraction territory.”
Key events to watch this week:
Reserve Bank of Australia rate decision Tuesday
Fed Governor Lael Brainard speaks Tuesday
Federal Reserve Minutes, Wednesday
China Caixin Composite and Services PMI, Wednesday
EIA Crude Oil Inventory Report, Wednesday
Philadelphia Fed President Patrick Harker speaks Wednesday
James Bullard of the St. Louis Fed, Raphael Bostic of the Atlanta Fed and Charles Evans of the Chicago Fed speak at separate events Thursday
Reserve Bank of India Interest Rate Decision Friday
Some of the main movements in the markets:
The S&P 500 was up 0.8% at 4 p.m. New York time.
The Nasdaq 100 rose 2%
The Dow Jones Industrial Average rose 0.3%
MSCI World Index rose 0.8%
The Bloomberg Dollar Spot Index rose 0.2%
The euro fell 0.7% to $1.0970
The British pound was unchanged at $1.3114
The Japanese yen fell 0.2% to 122.76 per dollar
The 10-year Treasury bond yield advanced two basis points to 2.40%
Germany’s 10-year yield fell five basis points to 0.51%
UK 10-year bond yields fell six basis points to 1.55%
West Texas Intermediate crude rose 4.4% to $103.60 a barrel.
Gold futures rose 0.7% to $1,936.70 an ounce.
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