Stocks, futures advance on planned US-Russia talks

Bloomberg

Stocks rise on Friday as planned talks between Russia and the US over Ukraine alleviated some investor gloom about geopolitical risks.
Europe’s Stoxx 600 Index and US equity futures advanced after Russian Foreign Minister Sergei Lavrov agreed to meet US Secretary of State Antony Blinken for talks in Europe next week. On Thursday, President Joe Biden warned that the probability of an invasion of Ukraine is still “very high.”
Bond yields and the dollar were little changed, while gold and the yen dipped.
Crude oil falls as traders balanced the potential return of Iranian barrels — if the nation reaches a nuclear accord with world powers — against the risk of disruption to Russian energy supplies.
Global stocks are set for a second week of losses, sapped by the standoff between Russia and the West over Ukraine as well as the prospect of tightening Federal Reserve monetary policy. Some $2.2 trillion of option expirations set to hit the market may exacerbate volatility.
Bets on a sharper Fed interest-rate liftoff in March have eased somewhat in light of geopolitical tension. But investors continue to be vexed by the question of how markets will cope as stimulus ebbs.
“Despite the recent volatility, it’s important to remember that we are still in an environment of robust economic and earnings growth, and in our base case we expect upside for equity markets over the balance of the year,” Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a note.
In Europe, Orion Oyj soared by a record, while Hermes International dropped the most since 2016 after the French luxury-goods company reported a decline in leather-goods sales. The French state will inject about 2.1 billion euros ($2.4 billion) into Electricite de France SA as the combination of reactor shutdowns and a government power-price cap batters the utility’s finances.
Meanwhile, Meituan tumbled the most in nearly seven months after China issued new guidelines asking for food delivery platforms to cut fees. The move caused a broad selloff in technology shares, with the Hang Seng Tech Index closing 3.2% lower while the benchmark Hang Seng Index dropped 1.9%.
Singapore plans to expand wealth taxes and raise its Goods and Services Tax over a two year period as it seeks to restore finances that had been battered by the pandemic.
Fed Bank of St. Louis President James Bullard said bringing down inflation may require the central bank to overshoot a neutral target interest-rate, which he sees as about 2%. Fed Bank of Cleveland President Loretta Mester said she supports hiking rates next month and tightening policy at a faster pace if needed to curb price pressures.
The European Central Bank should wind down net bond-buying in the summer, while giving itself more flexibility on the timetable for any subsequent interest-rate increase, Governing Council Member Peter Kazimir said in an interview.
In the speculative fringe of global markets, cryptocurrencies steadied after sharp losses, leaving Bitcoin around $41,000.
The recent geopolitical gyrations “have taught us that we are likely to remain in this off-and-on tunnel, whipped around by news, hope and surprise actions,” said Wai Ho Leong, a strategist at Modular Asset Management in Singapore. “It will be like this until there is a fundamental breakthrough in the talks.”