Yesterday, Wall Street indexes erased their gains accumulated at the start of the week. Tech stocks got cut indiscriminately. The Nasdaq 100 lost 3% in the battle. The seven largest stocks in the index, which account for nearly 50% of its weight, lost between 2 and 7.5%. At the same time, the S&P500, which is largely inbred in large caps, lost 2.1%. As for the Dow Jones, less weighted in technology files, its decline is slightly less at 1.78%.

For the past few days, indexes variations have been inversely correlated to the VIX volatility index, the VIX itself moving according to the declarations from Russia and the US on the situation in Ukraine. When the fear of a Russian invasion increases, nervousness rises and so does volatility, while stock market indexes fall. This happens when the Biden administration says that the Kremlin is lying or when the Russian and Ukrainian propaganda media accuse each other of throwing fuel on the fire to the right or left. Conversely, markets go up in the opposite pattern.

Yesterday, the mood was rather gloomy and rumors suggested that Russia was going to attack, which fueled another fall of the technology sector in the United States. But the announcement if a meeting next week between the heads of diplomacy of Biden (Antony Blinken) and Putin (Sergei Lavrov) has relaxed the atmosphere and propelled Wall Street in the green. This morning, there were mixed signals again, and Wall Street was in the red again.

Outside of tensions in Eastern Europe, several other forces are at work to close the week. First, a new series of corporate results, which are once again quite good. Second, the Iranian nuclear talks, which if successful could pave the way for an increase in crude supply. It is this prospect that has deflated oil prices from their recent peaks. In addition, we should not forget about monetary policy with the countdown launched before the Fed's rate decision in less than a month on March 16. Yesterday afternoon, St. Louis Fed boss James Bullard opined that the institution may have to go beyond the 2% neutral interest rate target to combat inflation. His counterpart at the Cleveland Fed, Loretta Mester, for her part, spoke in favor of a pace of monetary tightening. Finally, the third Friday of the month, it is the clearing session on the markets, known as "triple witching hour", when index futures and options and stock options reach their monthly expiration. This is a source of additional volatility.

 

Economic highlights of the day:

The January figures for existing real estate and the Conference Board's index of leading indicators are on today’s agenda. Several U.S. central bankers are also expected to make speeches, but rather at the end of the day for European markets.

The dollar is slightly up to EUR 0.8815, while gold is down to USD 1894 per ounce. In the oil market, the trend is rather downward, with Brent crude at USD 91.91 and WTI at USD 90.42 per barrel. The yield on US 10-year debt is up 2 points to 1.98% but remains close to recent levels. Bitcoin is heckled at USD 40,480.

 

On markets:

* Dupont de Nemours, Celanese - The U.S. industrial materials maker announced Friday the sale of its mobility and materials division to Celanese, a specialty chemicals group, for $11 billion, as part of its refocus on electronics, automotive and hydraulic solutions. DuPont shares gained 1.6% in premarket trading and Celanese shares advanced 3.3%.

* Intel - Pat Gelsinger, Intel's chief executive, said Thursday he expects the company's profit margin to fall this year, then remain flat for several years before rebounding in 2025 as the semiconductor maker invests to meet demand. Intel's stock is down about 1% after the close of trading.

* Tesla - The Chinese market regulator announced Friday that Tesla will recall 26,047 Model 3 and Model Y vehicles produced by the U.S. carmaker in China.

* Amazon - Companies like Amazon employing self-employed delivery drivers will have to pay them a minimum wage of 37.80 Australian dollars per hour from March 1, the Australian state of New South Wales decided Friday.

* Deere & Co - The world's largest maker of agricultural equipment raised its annual profit forecast Friday, expecting higher margins on higher prices and solid demand. The stock is up 1.3% in pre-market trading.

* Berkshire Hathaway - Warren Buffet's company, which acquired nearly a million shares of Activision Blizzard before the announcement of the video game publisher's $68.7 billion takeover by Microsoft, said Thursday that the investment was made without knowledge of the Windows publisher's plans.

* Abbott Laboratories on Thursday announced a recall of some of its powdered infant formula products, including Similac, made at one of the company's Michigan facilities after reports of infections.

* NortonLifeLock - The U.S. cybersecurity specialist announced Thursday that it has postponed to April 4 the closing date of its proposed $8.6 billion takeover of rival Avast, as regulators in the U.K. and Spain have yet to give their opinion on the deal.

* Roku - The streaming device maker reported lower-than-expected quarterly sales on Thursday due to supply chain tensions, sending the stock plunging nearly 20% in after-hours trading.

* Shake Shack - The fast-food chain announced Thursday that it expects to report lower-than-expected sales for the current quarter due to the Omicron variant of the coronavirus. The stock is down 12% in pre-market trading.