Positive Wall Street, awaiting the new intervention of Fed President Jerome Powell at the US Congress, and with constant attention to the updates of the war between Russia and Ukraine. The Dow Jones climbed 193 points (+ 0.57%), to 34,084 points; the S&P 500 advanced 0.49% to 4,405, while the Nasdaq was up + 0.22% to 13,782 points. 10-year Treasury rates are up 1.882%.
Oil prices are now turning back, following the blaze of the past few hours, which led Brent to cross the $ 118 a barrel threshold for the first time since February 2013, and WTI to jump to $ 114.46. Both contracts were up more than 6% before dropping the rallies. At 3.35pm Italian time, the WTI lost 0.88% to $ 109.59 per barrel, while Brent fell 0.57% to $ 112.09 per barrel. The sudden turnaround is explained by some rumors, according to which the agreement with Iran would be close, so much so that the signature could arrive within the next 72 hours. With the agreement, Tehran’s oil will return to the market, to the benefit of oil supply.
The fighting in Ukraine has entered its second week, following the invasion announced and launched by the Russian forces of Vladimir Putin last Thursday, 24 February. Ukrainians continue to staunchly defend the capital Kiev, while heavy bombardments hit the cities of Mariupol and Kharkiv.
Meanwhile, the Russian Defense Ministry, according to reports from the Tass agency, has announced that the operations of the Russian army will take “pauses” to allow the evacuation of civilians from Ukraine. “We are ready to create humanitarian corridors anywhere, anytime.”
The outcome of the negotiations between the Russian and Ukrainian delegations is awaited: according to what was communicated by the head of the Russian delegation Vladimir Medinsky, the meeting will be held today in the Brest region of Belarus.
“The situation is very fluid in Ukraine … We don’t know what the bottom the markets will hit, but we continue to believe that the US economy will report above-average growth this year,” Scott Wren told CNBC. , senior global market strategist at Wells Fargo Investment Institute.
From the macroeconomic front, new indications have arrived on the solidity of the US economy and also new confirmations on the problem of galloping inflation.
In the week ending February 26, the number of American workers who applied to receive initial jobless claims fell by 18,000 to 215,000, to its eight-week low in two months. The figure was better than expected by economists, who had predicted a limited decline of 225,000 units, compared to 233,000 units the previous week (revised upwards).
The productivity of the United States for the fourth quarter was confirmed to grow by 6.6%, at a slower pace than the estimated + 6.7%. Unit labor costs, on the other hand, jumped by 0.9%, significantly revised upwards compared to the + 0.3% initially communicated, confirming the fears related to the increase in inflation.
After speaking to the US House of Representatives, Federal Reserve Chairman Powell will speak in the Senate today. In his speech yesterday, Powell confirmed his intention to raise interest rates in March, warning that “the impact of the invasion of Ukraine on the US economy is very uncertain”. The central banker assured that “the Federal Reserve closely monitors the risks of further upward pressure on inflation expectations and inflation, considering various factors”.
Released yesterday the Beige Book, the report on US economic conditions that the Fed publishes eight times a year, showing that, since mid-January, US economic activity has grown at a pace between modest and moderate, and that consumer spending was generally weaker than in the previous report, due to the impact of the Omicron variant.
“Many districts have reported that the jump in Covid-19 cases has temporarily disrupted business activities.”
The Beige Book also revealed that “the broad and solid demand for workers remains hampered by the equally widespread indication of labor shortages” and that “some districts have signaled an acceleration in prices”, confirming the flare-up of inflation in USA.
“All the districts – it continues – have noticed that the problems of supply chains and the low level of stocks continue to slow down growth”.
There was also “a certain weakening of financial conditions”, while “the increase in input costs was cited as the factor that affected various industries, and that the high costs of transport were also particularly significant”.