Today in the Market (2/24/2022)

Good Evening. Russia’s invasion of Ukraine (the biggest invasion in Europe since WWII) whipsawed markets.

As Russia’s military invasion of Ukraine roiled financial markets around the world, U.S. equities staged a stunning reversal Thursday, with Wall Street’s main benchmarks each plunging more than 2% in early trade.

The Nasdaq Composite recovered from a morning sell-off that saw the index drop more than 3% to finish 3.4% higher, its best day of 2022. After plummeting more than 800 points during intraday trading, the Dow Jones Industrial Average closed in positive territory up 0.28%, while the S&P 500 rebounded from a 1.5% decline to end the day 1.5% higher.

ECONOMY

Stocks in Russia have been selling precipitously. According to Bloomberg data, the market’s third-worst drop in local currency terms occurred on Thursday following its military invasion of Ukraine.

As of 5:28 p.m. in Moscow, the benchmark MOEX Russia Index was trading 38% down, wiping out more than $200 billion in shareholder holdings as Western leaders criticized the Kremlin and threatened to take additional action aimed squarely at Russia’s pocketbook.

This is the first time since 1987 that such a major selloff has hit a market worth more than $50 billion, according to Bloomberg’s examination of historical data.

OIL

gas pump, petrol stations, petrol-1914310.jpg

Following Russia’s decision to start a major invasion of neighboring Ukraine, global oil prices jumped above $100 per barrel for the first time since 2014.

Western governments are poised to impose sanctions on the sale of Russian crude, the world’s second-largest supplier behind Saudi Arabia, later today as a result of the invasion, which might also disrupt important natural gas pipelines vital to the Europe’s energy mix.

The Biden administration suggested on Wednesday that if prices spiked as a result of a Russian attack, it might tap the nation’s Strategic Petroleum Reserve, but stockpiles are at their lowest levels since 2002, thanks to the President’s decision to release 50 million barrels last November.

“Depending on the response from the U.S. and Europe, oil and gas prices are at risk of significant further rises, thereby reinforcing inflationary pressures and weighing on global growth, and eventually demand for crude oil,” said Ole Hansen, head of commodities strategy at Saxo Bank. 

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