Wall Street wiped out most of its pre-market losses on Monday, despite the surge in commodities, as investors still harbor hopes of an easing of the Russian-Ukrainian crisis. The Dow Jones is expected to decline by 0.6%, while the S&P 500 shows a comparable decline (-0.5%). The Nasdaq only returns 0.6%. The barrel of WTI crude climbed 2% on the Nymex to nearly $118, while Brent North Sea crude rose 3% to $121. The ounce of gold stabilizes at $1.967. Bitcoin is moving around $39,000. The dollar index advanced 0.2% against a basket of currencies.
A third 'round' of negotiations between Russia and Ukraine will begin today, without major hope however. A Kremlin spokesman said Ukraine should change the constitution and reject demands to join any bloc. Ukraine must also recognize Crimea as Russian, and Donetsk and Lugansk as independent states. If these conditions are met, then Russian military action will stop “in a moment”, the spokesman promised. A Russian delegation arrived in Brest, Belarus, on Monday to meet Ukrainian negotiators, according to the Russian agency RIA. In addition, Russian and Ukrainian foreign ministers Sergey Lavrov and Dmitro Kuleba are due to meet in Antalya, Turkey on Thursday, according to Turkish Foreign Minister Mevlut Cavusoglu.
In the meantime, the threat brandished by the United States of a ban on Russian oil imports is driving up crude oil prices, accentuating inflationary fears. US Secretary of State Antony Blinken said yesterday that the US and its European allies were discussing the possibility of banning these imports of Russian oil. The Russian-Ukrainian conflict therefore threatens to weigh down global economic growth, which once again has a severe impact on the stock markets, with a growing risk of stagflation. Such a boycott on Russian oil would indeed have a very strong effect on supply…
Moscow also announced on Monday the establishment of humanitarian corridors from several cities in Ukraine, but Kyiv denounced what it describes as manipulation since civilians are supposed to be evacuated to Russian territory or Belarus. Ukrainian Deputy Prime Minister Irina Vereshchuk has called for the evacuations to be carried out via Lviv, in western Ukraine.
Russia, on the other hand, would support the proposal of the Director General of the International Atomic Energy Agency (IAEA), Rafael Grossi, to hold a tripartite meeting with Ukraine to guarantee the safety of Ukrainian nuclear installations within the framework of the current offensive. Mikhail Ulyanov, the Russian representative to the IAEA, nevertheless refused that this meeting be held in Chernobyl. On Friday, a fire in a building near the Zaporizhia power plant in Ukraine caused serious concern. According to the IAEA yesterday Sunday, the Zaporijjia plant continues to be operated by the usual staff, but under the orders of the commander of the Russian forces who have taken control of the site. Russian forces have also taken control of the former Chernobyl nuclear power plant. According to the Elysée, Putin would have committed during a telephone interview Sunday with Emmanuel Macron to respect the standards of the IAEA for the protection of the power stations. The Russian president has given his agreement for a dialogue to begin between the IAEA, Ukraine and Russia so that the power stations are made safe, added the Elysée.
On the economic front today across the Atlantic, the figures for American consumer credit for the month of January will be known at 9 p.m. (consensus +22 billion dollars according to FactSet).
The morning was marked on Monday by the publication of German industrial orders and retail sales, which rose more than expected in January. Factory orders rose 1.8% in January seasonally adjusted, after rising 3% (revised upwards) in December, according to data from the Federal Statistical Office. The FactSet consensus predicted a 1% rise in January. Retail sales in Germany appreciated by 2% in January in real terms (1.3% of FactSet consensus), after a fall of 4.6% (revised) in December, despite the health restrictions still in force in the face of the Omicron variant. The Halifax UK house price index for the month of February rose 10.8%. Finally, the
Tomorrow Tuesday, operators will monitor the balance of international trade in goods and services in the United States, as well as wholesale inventories. On Wednesday, the US Department of Labor's JOLTS report on job openings will be announced, shortly before the weekly report from the Department of Energy on domestic oil inventories. US consumer price figures for the month of February, announced on Thursday, should be a key event this week. The consensus is currently 0.7% increase compared to the previous month and 7.9% over one year. The CPI excluding food and energy is expected to rise by 0.5% compared to January and by 6.4% over one year. The US weekly jobless claims are also expected on Thursday. At last,
In corporate news on Wall Street, Ciena and National Steel will announce their latest accounts today. It should also be noted that more and more American companies are suspending their activities in or with Russia. Payment card specialists Visa and Mastercard have suspended their operations with Russia following the invasion of Ukraine. PayPal had already made a comparable decision. American Express has suspended operations in Russia and Belarus. Coinbase, the flagship cryptocurrency exchange, has indicated that its users from countries sanctioned by the international community will no longer be able to open an account. Netflix has also just announced a suspension of its services in Russia.
Uber takes 3% before market on Wall Street, while the ride-hailing services giant has just raised its profit forecasts for the current quarter. Adjusted earnings before interest, taxes, depreciation and amortization are expected to be between $130 million and $150 million, the San Francisco-based company said Monday. That's more than the $100 million to $130 million forecast by Uber when it announced fourth-quarter results last month, and more than the $120 million forecast by analysts on average.
“Our mobility business is rebounding from Omicron much faster than expected,” said Chief Executive Dara Khosrowshahi. “Whether it's for travel, commuting, or nights out, we're seeing healthy and growing demand across all use cases, which shows just how eager consumers are to get moving again.”
The executive said the airport's gross bookings at the end of February had increased by more than 50% compared to the previous month, and is preparing for the next travel season “to be one of the strongest of all. time”. The more optimistic outlook reflects the rebound in demand for ride-sharing services, which had weakened earlier in the year at the height of the Omicron impact. Uber said travel recovered 90% and mobility gross bookings recovered 95% in February compared to the same period in 2019. Meanwhile, Uber's delivery business, which includes Uber Eats continued to see strong demand with the annualized fill rate for reservations hitting an all-time high in February.
Ciena, the American communication equipment manufacturer, has just published this Monday, for its first fiscal quarter 2022 ended at the end of January, slightly short revenues at 844 million dollars, as well as a GAAP net profit of 29 cents and that an adjusted EPS of 47 cents. The consensus was 45 cents adjusted EPS for $857 million in revenue. The group is carrying out an accelerated share buyback plan of 250 million dollars. Gary Smith, CEO of the business, points to double-digit revenue growth year-over-year and solid demand, with a very strong increase in orders providing additional fiscal year visibility.
Bed Bath & Beyond jumped nearly 110% before the stock market on Wall Street, while the president of GameStop, Ryan Cohen, has just taken a stake of nearly 10% in the capital of the American distributor of products for the home. Cohen, also a co-founder of online pet products retailer Chewy, seems keen to shake things up at ‘BBB'. In a letter to the group's Board of Directors, he criticizes the current management and notes that the retailer is struggling to cope with supply chain challenges and regain market share. Bed Bath & Beyond responded, saying it would carefully consider Cohen's proposals and hoping for constructive dialogue. The GameStop president believes BBB needs to fortify its operations and maintain the right mix in stock to meet demand. He adds that Bed Bath must simultaneously explore strategic alternatives, including a separation from Buybuy Baby… and a sale of the entire group!