S&P 500 Tumbles on Escalating Ukraine Disaster, APAC Posited Decrease


  • Dow Jones, S&P 500 and Nasdaq 100 indexes closed –1.43%, -1.91% and -3.07% respectively
  • Danger-off sentiment was prevailing as buyers mulled escalating Russia-Ukraine tensions
  • Asia-Pacific markets look set to comply with a detrimental US lead. Crude oil prices hit recent 7-year highs

Ukraine Disaster, US Earnings, Inflation, Crude Oil – Asia-Pacific Week-Forward:

Wall Avenue shares ended a risky week with a bitter tone as buyers weighed escalating geopolitical tensions on the border of Russia and Ukraine. US Nationwide Safety Adviser Jake Sullivan mentioned on Friday that there have been indicators of Russian escalation on the Ukraine border and that it was attainable that an invasion might happen in the course of the Olympics. Gold costs surged alongside crude oil, that are buying and selling at their highest stage since 2014. Equities pulled again broadly amid risk-off sentiment, with the tech-heavy Nasdaq 100 falling over 3%.

Lingering geopolitical unrest and fears concerning the Fed tightening financial coverage might proceed to suppress danger property within the close to time period. Final week, higher-than-expected US CPI figures and hawkish feedback from Fed officers despatched shockwaves by way of the markets. Traders are more and more satisfied about the opportunity of a 50bps fee hike on the March FOMC assembly, sending the US Dollar larger and shares decrease.

On the earnings entrance, over 70% of the S&P 500 corporations have reported outcomes to date, amongst which 77% have overwhelmed market expectations with a median earnings shock of 8.6%. The blended earnings development fee for these corporations is 30.3%on 12 months, marking the fourth straight quarter of earnings development above 30%, in response to Factset. It’s value noting that just about three quarters of corporations have highlighted inflation throughout their earnings calls, underscoring rising value ranges which can be having an outsized impression to their margins and operations.

S&P 500 Tumbles on Escalating Ukraine Crisis, APAC Posited Lower

APAC markets look set to kick off the week on the again foot following a bitter lead from Wall Avenue. Futures in Japan, mainland China, Australia, Hong Kong, South Korea, Taiwan, Singapore, India, Thailand and Indonesia are all poised to open within the pink. US fairness futures prolonged decrease throughout Monday’s APAC morning session, underscoring fragile sentiment.

WTI crude oil costs leaped 4.3% on Friday and held steadily on the open as buyers mulled the impression of the Russia-Ukraine standoff on oil provide. Ukraine is an important transit hub for oil and fuel between Russia and the European Union, transporting 11.9 million metric tones of crude oil between them in 2021, in response to S&P International. Escalating tensions within the area might add provide constraints in an already tight market, sending costs larger. This will additional exacerbate issues about rising value pressures and strengthen the case for Fed tightening to comprise inflation.

For the week forward, Wednesday’s China inflation and US retail gross sales figures dominate the financial docket alongside Thursday’s launch of FOMC assembly minutes. Discover out extra from the DailyFX calendar.

Wanting again to Friday’s shut, 9 out of 11 S&P 500 sectors ended decrease, with 80.4% of the index’s constituents closing within the pink. Info know-how (-3.01%), shopper discretionary (-2.82%) and communication providers (-2.54%) have been among the many worst performers, whereas vitality (+2.79%) gained.

S&P 500 Sector Efficiency 11-02-2022

S&P 500 Tumbles on Escalating Ukraine Crisis, APAC Posited Lower

Supply: Bloomberg, DailyFX

S&P 500 Index Technical Evaluation

The S&P 500 index might have entered a significant correction after breaching under an “Ascending Channel” as highlighted on the chart under. Costs have probably shaped a “Double High” chart sample final week, hinting at additional draw back potential with a watch on 4,300 for assist. The MACD indicator is about to type a bearish crossover beneath the impartial midpoint, suggesting that promoting stress could also be constructing.

S&P 500 Index – Every day Chart

S&P 500 Tumbles on Escalating Ukraine Crisis, APAC Posited Lower

Chart created with TradingView

Nikkei 225 Technical Evaluation:

The Nikkei 225 index breached under a “Symmetrical Triangle” sample and thus opened the door for additional draw back potential. Costs have rebounded during the last two weeks, however the general pattern stays bearish-biased. The decrease trendline of the “Symmetrical Triangle” has now turn out to be an instantaneous resistance. The MACD indicator shaped a bullish crossover, suggesting that purchasing stress could also be constructing.

Nikkei 225 Index – Every day Chart

S&P 500 Tumbles on Escalating Ukraine Crisis, APAC Posited Lower

Chart created with TradingView

ASX 200 Index Technical Evaluation:

The ASX 200 index returned to the range-bound zone between 7,200 and seven,500, using a powerful technical upswing. Costs have pulled again to the ground of the vary in search of rapid assist. The MACD indicator shaped a bullish crossover beneath the impartial midpoint, suggesting {that a} technical rebound is underway.

ASX 200 Index – Every day Chart

S&P 500 Tumbles on Escalating Ukraine Crisis, APAC Posited Lower

Chart created with TradingView

— Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Feedback part under or @margaretyjy on Twitter

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