Wall: Dow strong losses against the background of the Russian invasion of Ukraine

LAST UPDATE: 18.02

Wall Street stock indexes are losing ground, with investors’ eyes on the world focused on Russia’s invasion of Ukraine, which began at dawn on all frontiers of the two countries, as well as from the territory of Belarus and many of them to transfer funds to safe investment products.

The invasion comes at a time when markets are already under pressure from the highest inflation in the last 40 years in the US, after recovering from the economic shock of the coronavirus pandemic.

On the dashboard, the industrial Dow Jones declines by 601.99 points or 1.82%, with the widest S&P 500 to “lose” 48.74 points or 1.11% and the technological Nasdaq to record losses of 53.46 points or 0.41%.

The S&P thus sank deeper into correction, while the Nasdaq briefly moved into a bear market, a decline of more than 20% from its most recent all-time high, but later recovered some of its losses.

Many Ukrainian cities have been hit by rockets since the morning, including in Kiev, and Russian troops have invaded parts of Ukraine from the north, south and east. Ukrainian airports have also been occupied. Russian President Vladimir Putin, in his speech, spoke of a military operation to “demilitarize” and “de-Nazify” Ukraine, while stating that he has no intention of occupying parts of the country.

NATO, meanwhile, has responded with military reinforcements to its eastern wing, which borders Ukraine, and US President Joe Biden has condemned the attack, saying “everyone is going to put Russia in charge.”

“Russia alone is responsible for the deaths and destruction that this attack will bring, and the United States and its allies will respond in a united and decisive manner,” said President Biden.

The Russian invasion of Ukraine “is much – much worse than the average scenario of expectations in the markets. We are dealing with at least a 5% to 6% drop, which brings us even closer to the bear market, said Binky Chadha, executive of Deutsche Bank.

Brent crude jumped 7.7% to $ 104.56 a barrel, exceeding $ 100 for the first time since 2014. US WTI crude is up 7.2%, just below $ 100 a barrel. barrel.

US government bond prices are rising, with the 10-year yield falling 1.86% as investors seek investment shelters. Gold gained 3.2% to $ 1,970 an ounce in the same context.

European markets are also experiencing strong turmoil, with the pan-European Stoxx 600 falling 3.6% to a low this year.

“Confirmation of the worst-case scenario for a Russian invasion beyond the breakaway regions in the east is a shock to the stock and oil markets. notes Kathy Bostjancic, chief US economist at Oxford Economics. “In such a context of uncertainty and a negative turn in economic activity, the Fed is expected to raise interest rates by only 25 basis points, but the increase will take place,” he said.

In addition to some tech stocks, there is a sell-off in general, with BofA and JP Morgan Chase losing more than 4.5%. Boeing is down about 3%, while United Airlines is losing more than 5%.

“Investors should expect strong sanctions against Russia, which will slow growth and keep commodity prices under pressure,” said Dennis DeBusschere of 22V Research.

Of the 30 Dow Jones shares, 4 saw gains, while 26 saw losses. The gains are led by those of Salesforce, Microsoft, Intel, while those of losses are led by JP Morgan Chase, Travelers Cos., American Express.

Macro

The U.S. economy grew at an annual rate of 7% in the fourth quarter of 2021, slightly faster than originally estimated, as Americans increased their spending and businesses continued to build their inventories and invest in the midst of strong recovery after the catastrophic 2020.

Previous data had shown GDP growth of 6.9%. The revised measurement confirmed analysts’ estimates in a WSJ poll for 7% growth.

For 2021 overall, US GDP grew by 5.7%, showing the largest annual increase since 1984.

However, the resurgence of the pandemic at the end of 2021 due to the micron mutation hit economic activity, with growth slowing to less than 2% in the first quarter, according to analysts.

Unemployment benefits for US states fell last week as the labor market continued to recover from the shock of the pandemic.

In particular, the initial applications for unemployment benefits fell by 17,000 to 232,000 in the week ended February 19, according to the US Department of Labor. Analysts’ average estimates in a Bloomberg poll put the applications at 235,000.

Ongoing applications, meanwhile, fell to 1.48m for the week to 12 February.