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A three-day losing streak for the Dow, Nasdaq, S&P 500 and small-cap Russell 2000 is what we see as of Monday’s closing bell, with the Nasdaq flat for most of the last hour of trading, finishing just -0.002% on the day. The Dow, which lost -172 points at the close, -0.50%, had been down -434 points at its low. The S&P 500 spent almost all day submerged, closing -0.38%.
Tensions at the Ukraine border led the bearishness today, but with an interesting wrinkle in the Energy space: instead of taking the lead for sectors as WTI prices for March are now up in the mid-$90s per barrel, Energy was the worst-performing sector on the day. Because an invasion of Ukraine by Russia would wreak havoc on natural gas supply for Europe, speculation now is that oil companies the world over would start pumping to fill the void immediately, which would sent energy prices down.
The U.S. has now officially closed its Ukraine embassy in the capital city of Kyiv, but efforts to continue negotiations rather than embark on a ground war persist at this hour. An avoidance of bloodshed in favor of a peaceful “solution” may still create more questions than investors might be comfortable with, but an outright battle between the former Soviet states would likely keep bearishness present in the markets for the foreseeable future.
Wednesday afternoon brings us the release of the latest minutes from the Federal Open Market Committee (FOMC) meeting which concluded three weeks ago. It was last month when the December FOMC minutes were released that we first learned the Fed was interested in draining the $9 trillion balance sheet it has accrued over the past two years, which set off a torrent of stock-selling with this surprise hawkish stance.
Currently, Fed members are taking pains to be transparent, signaling more readily that a half-point interest rate hike is on the way upon the closure of the asset purchase program in mid-March. Also, a Consumer Price Index (CPI) headline last week nearly quadrupled what Fed members have long cited as optimum +2% inflation, and there has been little hesitation to express the level of concern the Fed has for the +7.5% figure.
Regardless whether the transitory aspects of inflation will eventually show this as peak inflation for the cycle, stemming this tide now appears paramount among Fed members speaking publicly. We shall see in the January minutes how much interest in a 50-basis-point rate hike there already was, prior to the CPI headline coming out.
Finally today, shares of Splunk have risen +9% on news that it will be acquired by Cisco Systems (CSCO - Free Report) for $20 billion — Cisco’s largest acquisition target ever. The machine-data software firm indicates Cisco’s interest in branching out in “horizontal tech,” or applications management, security software and other enterprises. Cisco shares are flat after-hours, down nearly -16% year to date.
Image: Bigstock
3-Day Losing Streak on Ukraine Tensions
A three-day losing streak for the Dow, Nasdaq, S&P 500 and small-cap Russell 2000 is what we see as of Monday’s closing bell, with the Nasdaq flat for most of the last hour of trading, finishing just -0.002% on the day. The Dow, which lost -172 points at the close, -0.50%, had been down -434 points at its low. The S&P 500 spent almost all day submerged, closing -0.38%.
Tensions at the Ukraine border led the bearishness today, but with an interesting wrinkle in the Energy space: instead of taking the lead for sectors as WTI prices for March are now up in the mid-$90s per barrel, Energy was the worst-performing sector on the day. Because an invasion of Ukraine by Russia would wreak havoc on natural gas supply for Europe, speculation now is that oil companies the world over would start pumping to fill the void immediately, which would sent energy prices down.
The U.S. has now officially closed its Ukraine embassy in the capital city of Kyiv, but efforts to continue negotiations rather than embark on a ground war persist at this hour. An avoidance of bloodshed in favor of a peaceful “solution” may still create more questions than investors might be comfortable with, but an outright battle between the former Soviet states would likely keep bearishness present in the markets for the foreseeable future.
Wednesday afternoon brings us the release of the latest minutes from the Federal Open Market Committee (FOMC) meeting which concluded three weeks ago. It was last month when the December FOMC minutes were released that we first learned the Fed was interested in draining the $9 trillion balance sheet it has accrued over the past two years, which set off a torrent of stock-selling with this surprise hawkish stance.
Currently, Fed members are taking pains to be transparent, signaling more readily that a half-point interest rate hike is on the way upon the closure of the asset purchase program in mid-March. Also, a Consumer Price Index (CPI) headline last week nearly quadrupled what Fed members have long cited as optimum +2% inflation, and there has been little hesitation to express the level of concern the Fed has for the +7.5% figure.
Regardless whether the transitory aspects of inflation will eventually show this as peak inflation for the cycle, stemming this tide now appears paramount among Fed members speaking publicly. We shall see in the January minutes how much interest in a 50-basis-point rate hike there already was, prior to the CPI headline coming out.
Finally today, shares of Splunk have risen +9% on news that it will be acquired by Cisco Systems (CSCO - Free Report) for $20 billion — Cisco’s largest acquisition target ever. The machine-data software firm indicates Cisco’s interest in branching out in “horizontal tech,” or applications management, security software and other enterprises. Cisco shares are flat after-hours, down nearly -16% year to date.
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