Stocks in Europe and index futures in the US operate with significant rallies, while gold and oil chain falls
The Federal Reserve (Fed) will be the main protagonist of the day, but the signs that there is some understanding between Russia and Ukraine give the market a boost. US futures and European stocks extended gains after the Kremlin hinted at progress in peace talks with Ukraine, adding to positive sentiment fueled by China’s pledge to stabilize its markets.
Contracts indexed to the Nasdaq 100 touched off 2%, while contracts on the S&P 500 rose more than 1%. US-listed Chinese stocks soared, with Alibaba Group Holding Ltd. and Baidu Inc. both rising by at least 20% pre-opening. Didi Global Inc. jumped more than 40%. The Stoxx Europe 600 index, meanwhile, surpassed 2.5% appreciation, with technology stocks leading the way.
US 10-year Treasuries showed slightly higher premiums as the dollar retreated ahead of the Fed’s rate decision. Gold and oil linked losses.
President Joe Biden will travel to Europe on the 24th to attend NATO and European Union summits to discuss the latest developments in Ukraine’s war with key allies.
Asian markets also contribute to the upward movement in stocks. Stocks in Hong Kong and China rallied impressively after Chinese officials vowed to keep their stock market steady amid a historic move that wiped out $1.5 trillion in value during the past two sessions. In addition to a new lockdown in China, the market has reacted to speculation that Beijing’s ties to Russia would damage its relationship with the US. According to the official Xinhua news agency, Chinese Vice Premier Liu He said efforts to “rectify” internet companies are expected to end soon, which would ease tensions over the country’s siege of the sector.
Fed Day
Investors around the world want to see if a 0.25 percentage point hike in US interest rates is confirmed. It is virtually certain that the US central bank will choose to raise its reference rate by this proportion, creating a watershed in the fight against inflation, as the Fed has not raised the cost of money since 2018.
The market projects between six and seven rate hikes by the Fed this year, which would be a more forceful response to curbing inflation that has become the highest in 40 years.
However, as the global situation worsened with the war triggered by Russia, the search for clues that allow investors to understand the impacts on the economy is great. The invasion of Russia created a context of risk of shortages and strong pressure on commodity prices, which will have visible consequences for consumers’ pockets.
Equity markets rose on Wednesday after the Kremlin hinted at progress in peace talks with Ukraine, adding to positive sentiment fueled by China’s pledge to stabilize its markets. Treasuries and the dollar fell ahead of the Federal Reserve’s rate decision.
The S&P 500 rose for a second day, led by tech and retail stocks. West Texas Intermediate (WTI) crude advanced but stayed below $100 a barrel.
A neutral stance by Ukraine but maintaining its own armed forces “could be seen as a certain kind of compromise,” Kremlin spokesman Dmitry Peskov said on Wednesday, fueling optimism that a negotiated solution could be achieved. possible. Earlier, China pledged policies to spur economic growth and boost its financial markets.
US-listed Chinese stocks soared, with Alibaba Group Holding Ltd. and Baidu Inc. up as much as 20% in premarket trading, while Didi Global Inc. jumped more than 40%. The Stoxx Europe 600 index jumped as much as 2.9%, with tech stocks leading the charge as Prosus NV rebounded 21% from a record low.
A gauge of Asia-Pacific equities has advanced the most since 2020, with a benchmark tracking Hong Kong-listed mainland companies posting the biggest gain since the global financial crisis and a Chinese tech index hitting a record 20%.
“The market has in fact become oversold, irrational, on a dramatic route; now the real money is back for pricing,” said Castor Pang, head of research at Core Pacific Yamaichi.
West Texas Intermediate (WTI) crude rose but stayed below $100 a barrel. The International Energy Agency said on Wednesday that Russian oil production could fall by about a quarter next month. Treasuries fell, pushing 10-year and 30-year yields to their highest since 2019.
A 0.25 percentage point increase in the Fed rate, the first since 2018, to combat high inflation was widely anticipated, but there is less certainty beyond that on the next steps in monetary policy. While markets expect a total of seven such moves this year, policymakers also need to factor in growth risks arising from Russia’s invasion of Ukraine. Wednesday’s data showed that US retail sales slowed in February, suggesting consumers are cutting back on spending as inflation limits purchasing power.