Home ›› 19 Feb 2022 ›› Stock
Wall Street was set to mirror Europe’s modest advance in stocks as investors drew comfort from a high-level diplomatic attempt next week to avoid a Russian invasion of Ukraine even though shelling continued there for a second day.
S&P 500 futures were up 0.5 per cent and Nasdaq futures gained 0.7 per cent ahead of the opening bell and a long weekend on Wall Street, with stock markets closed on Monday for Presidents Day.
US Secretary of State Antony Blinken agreed to a meeting with Russia’s foreign minister Sergei Lavrov next week, raising the prospect of ending the standoff over Ukraine, but shelling in the eastern part of the country continued on Friday.
“The stock market environment is likely to remain exceptionally dependent on geopolitical and inflation developments, which could trigger significant market volatility over the next few weeks and months,” analysts at UniCredit bank said.
Oil was headed for a weekly fall as the prospect of extra supply from Iran returning to the market eclipsed fears of a possible supply disruption arising from a Russian invasion of Ukraine.
The STOXX (.STOXX) index of 600 European companies was up 0.2 per cent at 465 points, six percent below the lifetime high hit in the first week of 2022. Some good corporate news helped to keep stocks above water. In the United States, Deere & Co (DE.N), the world’s largest farm equipment maker, raised its annual profit forecast.
Renault (RENA.PA) jumped 1.9 per cent as the French carmaker swung into profit in 2021, while Finnish drug manufacturer Orion (ORNBV.HE) rallied 22 per cent to the top of the STOXX 600 following positive trial results for its prostrate cancer treatment.
On the data front in Europe, British retail sales grew faster than expected in January, recovering about half the losses suffered when a wave of coronavirus cases caused many shoppers to stay at home during December.
The MSCI All Country stock index (.MIWD00000PUS) was little changed.
Worries over the pace of anticipated interest rate hikes by the Federal Reserve have largely been priced into markets for now, helping to underpin sentiment, said Seema Shah, chief strategist at Principal Global Investors.
“It looks like because of geopolitical risk, it’s pushed back the chances of a 50 basis point hike, the markets have reduced their expectations,” she said.
“The market is getting close to peak in terms of rate expections. Once you hit that peak, things should settle down.”
Federal Reserve officials remain split over how aggressively they should hike interest rates from next month. Fed funds futures price about a 1/3 chance of a 50 bps hike in March.
US existing home sales are due later, though all eyes will be on the March 10 consumer inflation report ahead of the Fed’s meeting later that month.
