Prices waver after Biden-Putin summit announcement

  • Global stocks faltered on Monday after it was announced that Biden and Putin had tentatively agreed to hold talks on Ukraine.
  • The summit meeting could help keep military conflict in Europe off the radar for now, an analyst said.
  • Oil prices swung between gains and losses as the market weighed hopes for a diplomatic solution.

Global stocks swung between gains and losses on Monday after US President Joe Biden and his Russian counterpart Vladimir Putin agreed in principle to hold a summit on the Ukraine crisis soon.

Biden’s condition for the meeting is that Putin does not invade Ukraine, a scenario that still seems possible after Russian commanders were reportedly ordered to invade the neighboring country.

Futures on the Dow Jones and S&P 500 were broadly flat at 6:40 a.m. ET, pulling back from a larger move higher shortly after the news of the top. Nasdaq futures reversed gains and slipped 0.25%. Major U.S. stock markets are closed for the Presidents Day holiday on Monday.

Hopes for a diplomatic solution come after stocks closed sharply lower last week on fears that the Ukraine crisis could escalate into war in Europe.

On Sunday, US Secretary of State Anthony Blinken said Russia’s actions suggested it was on the verge of an invasion, after Russia extended joint military exercises in Belarus and several reports of troop deployments to the Ukrainian border.

The timing of the Biden-Putin talks will be decided after a meeting between US and Russian ministers on February 24, French President Emmanuel Macron said on Sunday.

“After a nervous shutdown in trade last week, sentiment has picked up to start the new week as French President Macron may successfully negotiate a summit between US President Biden and Russian President Putin, possibly helping to rule out the prospects of a military conflict burning off the radar for now,” Saxo Bank’s strategy team said in a note.

UBS said in a note on Monday that it considers a prolonged military conflict an unlikely risk at this stage, given the high economic costs for all parties.

Elsewhere, Asian equities pared losses as investors’ appetite for risk increased. The Tokyo Nikkei fell 0.8%, after trading down around 1.3%. The Shanghai Composite was flat, while the Hong Kong Hang Seng was down 0.7% at the close.

The pan-European Euro Stoxx 600 fell 0.4% and the Frankfurt DAX lost 0.3%. London’s FTSE 100 was trading flat.

Safe-haven gold gained ground earlier to hit an eight-month high but was slightly lower at $1,899.40 an ounce.

Oil swung between gains and losses as investors weighed their hopes for talks with Ukraine. Brent crude futures rose 0.6% to $91.94 a barrel, reversing an earlier drop that came after rising 1.3%. West Texas Intermediate rose 0.5% to $90.72 a barrel, rebounding from a slight decline.

On Sunday, ministers from Arab oil-producing nations said OPEC+ should stick to its current agreement to add 400,000 barrels of oil a day to production, defying calls to pump more and lower prices. price.

“The situation between Russia and Ukraine will almost entirely determine near-term price action, and unless there is a massive pullback from Russia, it is hard to see much oil price decline from here” , Jeffrey Halley, senior market analyst at Oanda, said in a statement. Remark.

Another lingering factor driving recent market sentiment has been the uncertainty surrounding the

Federal Reserve

plan to raise interest rates to curb soaring inflation. JPMorgan said over the weekend that it now expects the Federal Reserve to raise interest rates for nine straight meetings.

Data on a key metric watched by U.S. policymakers, PCE (personal consumption expenditure) is due Friday, and Deutsche Bank economists expect core PCE to hit 5.5% year-on-year, which would be the fastest pace since the early 1980s.

Read more: A BNY Mellon Wealth Management investment manager explains why he expects stocks to rebound 8-10% this year despite recent volatility – and shares 3 investment strategies to excel in the current mid-term bull market cycle


Comments are closed.