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Bloomberg
Stocks were mixed on Thursday as traders weighed geopolitical developments and a flurry of corporate earnings.
The Stoxx 600 Index was little changed, while US equity futures fall. Havens such as the yen and gold pushed higher. US 10-year Treasury yields retreated to about 2%. Crude oil declined.
Russian-backed separatists claimed Ukrainian forces violated cease-fire rules overnight, according to a report from RIA Novosti, a Russian state news agency. The Luhansk separatist claim doesn’t mention any casualties. Allegations of cease-fire violations from both sides are frequent.
Reckitt Benckiser Group
Plc jumped after forecasting profit margin growth, while Kering SA gained as Gucci sales surged past pre-pandemic levels. Nestle dropped after warning profitability may decline for a second year.
Oil, at one point down more than 3%, trimmed the retreat to some 1%. Crude had been hurt by the prospect of a resumption in official Iranian exports if diplomatic talks lead to a nuclear accord. But it has also been whipsawed by supply worries stemming from the Russian troop buildup.
The latest gyrations show that “equities markets are still vulnerable to Ukraine-Russia related geopolitical risks,†said Lee Jaesun, an analyst at Hana Financial Investment Co.
Those concerns over Ukraine overshadowed latest Fed minutes, in which officials concluded they would start raising rates soon and were on alert for persistent inflation that would justify faster tightening. There were few new details on balance-sheet runoff plans.
Investors expect at least 150 basis points of Fed tightening in 2022 — up from 75 basis points just a few weeks ago — to fight price pressures. The worry is whether the pivot away from pandemic-era stimulus will squeeze economic growth and inject more turbulence across assets.
“The market will continue to be quite volatile until certain questions are clarified — for example, how these rate hikes are going to be laid out going forward,†Marcella Chow, JPMorgan Asset Management global market strategist, said on Bloomberg Television.
Chow said another issue was whether a more detailed roadmap for quantitative tightening would be laid out in the March Fed policy meeting.