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Peace Talks Fail, Amazon Buyback, U.S. CPI - What's Moving Markets

Economy Mar 10, 2022 06:36AM ET
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© Reuters

By Geoffrey Smith 

Investing.com -- Peace talks between the Russian and Ukrainian foreign ministers break up without visible progress, ending the euphoria of Wednesday. The U.K. expands its sanctions list to include Roman Abramovich and Oleg Deripaska.  Aluminum prices rise sharply as Rio Tinto (NYSE:RIO) severs links with its joint venture partner Rusal. Oil prices are also up again. Amazon (NASDAQ:AMZN) announces a stock split and a big buyback. U.S. inflation is expected to hit a new 40-year high in February, while the European Central Bank concludes its regular policy meeting. Here's what you need to know in financial markets on Thursday, 10th March.

1. Peace talks break down without progress

Global market euphoria cooled as negotiations between the foreign ministers of Ukraine and Russia broke down without any notable progress after a mere two hours.

Ukraine’s Dmytro Kuleba emerged saying that Russia wanted its complete surrender, while Russia’s Sergey Lavrov said that Ukraine seemed to want meetings for the sake of having meetings. He added for good measure that “we didn’t attack Ukraine.” In response to the attack on a maternity unit in Mariupol, Lavrov said Russia had told the UN three days ago that it had been evacuated and taken over by Ukrainian military personnel. Ukraine says 3 people, including a six year-old chid, were killed by an airstrike on the building.

Elsewhere, the U.K. finally expanded its sanctions list to include oligarchs including Roman Abramovich, the owner of Chelsea Football Club, as well as Oleg Deripaska, former chief executive of aluminum giant Rusal (HK:0486). Rusal was hit a double blow as its joint venture Rio Tinto said it would no longer supply bauxite to a key refinery in Ireland. Aluminum Mini Futures rose over 5% in response.

2. U.S. inflation set to hit new 40-year high; House passes spending bill

U.S. inflation is expected to have hit 7.9% in February, a new 40-year high, with the promise of more to come, given the surge in energy and commodity prices so far this month. The data will be released at 8:30 AM ET along with weekly jobless claims numbers.

On Wednesday, the House of Representatives finally passed a $1.6 trillion bill that will keep the Federal Government funded for the rest of the year.

The Ukraine emergency and the desire to win bipartisan support meant a last-minute increase in defense spending from what was set to be its lowest (as a percentage of GDP) since World War 2, while a raft of spending lines related to pandemic issues was cut.

The package also earmarked $13.6 billion in financial aid for Ukraine.

3. ECB wrestles with stagflation problem

European Central Bank President Christine Lagarde will hold her regular press conference at 8:30 AM ET (1330 GMT), after the bank’s latest policy-setting meeting.

The ECB is widely expected to stick to its previously announced intention of ending the Pandemic Emergency Purchase Program this month, while increasing asset purchases under a different program to cushion the impact of stimulus withdrawal. More important will be any change to Lagarde’s guidance at the press conference, a month after she appeared to open the door to interest rate hikes by the end of the year.

The ECB is facing an increasing risk of stagflation, as record energy prices threaten to keep inflation above target for much longer than previously thought.

A European Union summit is also taking place at the same time. Reuters reported there was not enough support for a French plan to extend joint borrowing to cover future spending needs on defense and energy.

4. Stocks set to open lower; Amazon's buyback, Oracle earnings eyed.

U.S. stock markets are set to open lower, as the euphoria over prospects for a quick end to the war in Ukraine faded.

By 6:15 AM ET (1115 GMT), Dow Jones futures were down 288 points, or 0.9%, while the S&P 500 futures contract was down 0.9% and the Nasdaq 100 futures contract was down 1.2%. The three main cash indices had gained between 2% and 3.6% on Wednesday on the news of the Lavrov-Kuleba meeting.

Stocks in focus later are likely to include Amazon, which announced a $10 billion buyback and a 20-for-1 stock split after the close on Thursday, as well as Oracle (NYSE:ORCL) and Ulta Beauty, which report after the close. Amazon's news softened the blow of fresh regulatory trouble with the Department of Justice

The exodus from Russia continued meanwhile, with Europe’s second-largest brewer Carlsberg (OTC:CABGY) saying it would carve out its local operations into a separate company and stop selling its namesake brand. Japanese-owned fast-fashion giant Uniqlo also reversed course and said it will stop operations in Russia.

5. Oil rebounds as UAE rows back comments on output increase

Crude oil prices rose sharply again as the prospect of an early peace faded, and the United Arab Emirates appeared to backtrack on comments that it may break with the OPEC+ pact on production discipline.

Iraq’s Energy Minister also repeated his country’s adherence to the pact, which had been criticised for not raising output quickly enough to accommodate the recovery in global demand after the pandemic. U.S. inventories fell again last week as record high gasoline prices failed to make a noticeable dent in consumption.

By 6:25 AM ET, U.S. crude futures were up 3.4% at $112.40 a barrel, while Brent crude was up 4.3% at $115.89 a barrel.

Peace Talks Fail, Amazon Buyback, U.S. CPI - What's Moving Markets
 

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Comments (13)
Dave Jones
Dave Jones Mar 11, 2022 2:23AM ET
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Corporate share buybacks. The bedrock of the American economy!
peter smith
peter smith Mar 10, 2022 9:43AM ET
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end the war now ... people can not pay 7$ for gas ... that s insane
peter smith
peter smith Mar 10, 2022 9:42AM ET
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seriously... just sign that agreement that ukrain will not join NATO and war is over . just get it done w small stupid ukrain .. better suffer w small country to stop that madness
Kochar Bipin
Kochar Bipin Mar 10, 2022 9:23AM ET
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Biden's bungling of the economy and now on global relations is responsible for pushing inflation to a 40 year high. It is high time he takes decisive steps to bring crude prices below $90 by mid April and to below $80 in 2023 and announces a food and fuel aid program to assist tens of million poor in developing countries like Sri Lanka who cannot afford food and fuel.
Chad Richer Than You
Chad Richer Than You Mar 10, 2022 9:18AM ET
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Fake Chads are dead
Maximus Maximus
Maximus Maximus Mar 10, 2022 8:41AM ET
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There's a special kind of hell for people who attack childrens hospitals and kill children
William Smith
William Smith Mar 10, 2022 8:33AM ET
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Biden's weakness is why Putin became an aggressor.   Biden's destruction of the US oil industry via anti oil executive orders is why oil prices have exploded.  Thanks Joe, this entire mess is your doing.
Maximus Maximus
Maximus Maximus Mar 10, 2022 8:33AM ET
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putinbot
Gary Moses
Gary Moses Mar 10, 2022 8:33AM ET
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Really. You actually think trump could do better. Russia has Nuclear Weapons. Sadly, They can do what they Want .
John Healy
John Healy Mar 10, 2022 8:33AM ET
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Wrong, Smith. This is the result of trying to buddy-up to an ex-KGB officer who has nukes, including tactical, at his psychotic fingertips. This is the general result of two decades of failing to recognize the threat, and the specific four-year failure of the Trump administration to get Putin to play nice. It’s Europe’s fault for allowing itself to become dependent on Russia’s oil and gas. I’m no Biden fan, but you finger-pointers haven’t read, heard or seen anything beyond the Fox Entertainment narrative. Get the facts.
Brad Albright
Brad Albright Mar 10, 2022 7:42AM ET
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Russian oligarch Leonid Nevzlin: “Everything that Putin touches dies. I am against the war. I am against the occupation. I am against the genocide of the Ukrainian people.”
Kaushal Shah
Kaushal Shah Mar 10, 2022 7:39AM ET
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really ??? people really wanna trust this news but I can't.
Ronald Warren
Ronald Warren Mar 10, 2022 7:26AM ET
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This piece doesn't cover it, buy two spending bills we're passed yesterday. 1.6 trillion for the government and 1.9 trillion for coronavirus relief, that includes $1,400 stimulus checks for Americans. That's 3.5 trillion in New debt!! That gets us near 34 trillion total. Frickin' madness!!
Brad Albright
Brad Albright Mar 10, 2022 7:26AM ET
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Ronald Warren: You are woefully misinformed and about 2 years behind.
Jt Overstreet
Jt Overstreet Mar 10, 2022 7:26AM ET
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Brad Albright wait till he finds out we landed on the moon
Benjamin USA
Benjamin USA Mar 10, 2022 7:26AM ET
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Ol triggered Ron the snowflake is watching Russian state media again
Brad Albright
Brad Albright Mar 10, 2022 7:26AM ET
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Jt Overstreet And that the Berlin Wall fell.
 
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