Futures on major US stock indices remain firmly positive, with Wall Street appearing to have every intention of putting the eve of the eve behind it. Yesterday the Dow Jones suffered the worst loss of 2022:
the index collapsed by more than 600 points, a record loss since the end of November. The S&P 500 lost more than 2%, while the Nasdaq lost 2.9%.
The Ukrainian crisis keeps markets around the world in check, with the escalation of tensions between Vladimir Putin’s Russia and the West in recent hours.
Futures, however, defy the winds of war, with those on the Dow Jones now advancing by 0.22%, those on the S&P making + 0.35% and those on the Nasdaq, the most solid, rising 0.50%.
In the background, investor nervousness is palpable. “Wall Street is very nervous, looks left and sees the escalation of geopolitical risks related to the situation in Ukraine, turns right and sees the potential for an aggressive monetary tightening by the Fed,” Edward Moya commented in a statement. , Oanda’s senior market analyst.
The US stock market thus starts to suffer the second consecutive week of declines. The Dow Jones lost 1.2% in the week; the S&P lost 0.9% and the Nasdaq fell 0.5%.
In the last few hours, US President Joe Biden said that the risk of an invasion of Ukraine by Russia is “very high” and that an attack could take place in the next few days, under the pretext of “a false flag operation. “. Today Biden will take stock of the situation with NATO, which has already expressed several reservations about the alleged withdrawal of Russian troops from the border.
Even earlier, NATO had accused Russia of having increased the number of soldiers deployed on the Ukrainian border, contradicting the statements of Moscow, which had instead announced that it had begun to withdraw some of the military units present in the area.
All this, while Kiev accused the pro-Russian separatists of having hit an asylum in the town of Stanytsia Luhanska, in the Lugansk region on the border with Russia, during a bombing.
Meanwhile, Ukraine has stressed its intention to join NATO, with President Volodymyr Zelensky saying joining the military alliance is a “guarantee of security” for Ukraine. NATO “is a guarantee of security. So how can we choose another path? For us it is a guarantee of not losing our independence”.
But attention is also turned to the Fed, after the statements of James Bullard, the super hawk of the American central bank led by Jerome Powell.
On the occasion of an event organized by Columbia University, Bullard said “that there has never been such a high risk in a generation that the situation could get out of control … one scenario could be that of a new surprise that at the moment we are unable to anticipate further growth in inflation, something we must do so that it does not occur “.
Bullard has already launched an appeal to the Fed in recent weeks to raise rates by one percentage point by July, to counteract inflation that travels to the record of the last 40 years.
“In general – added the banker – I would say that there is too much emphasis on the fact that inflation, at some point, will slow down in the future. Instead, we risk that inflation will not slow down, and in any case 2022 will be the second consecutive year in which we will be struggling with high inflation. So, given the situation, the Fed should move faster and more aggressively than it should in other circumstances. “
But Bullard also said that monetary policy change shouldn’t be defined as an attempt to hold back the markets and the economy.
“It is not a restrictive policy. It is a removal of accommodative policy.” Ten-year Treasury rates are down to 1.967%.