Ukraine Tensions Ease
The US stock markets are fluctuating but essentially little changed today, with equities recouping much of their earlier declines amid signs of progress in diplomatic attempts to ease tensions surrounding Ukraine.
Wednesday, March 12, 2014 - 00:00
US Secretary of State John Kerry will meet with his Russian counterpart Sergei Lavrov in London this Friday - ahead of a scheduled referendum Sunday on whether the Ukraine's Crimean peninsula will join Russia or go independent. Despite the growing inevitability of this occurrence, at least the global markets seem to be reassessing, looking at that situation and thinking maybe it is not going to turn out to be a disaster in Russia and Ukraine. Geopolitical developments have moved to the forefront this week as a dearth of fresh corporate results and economic data offered no catalysts to push the benchmark S&P index above its most recent record close on Friday. As of 1PM EST, the Dow had fallen 0.09%, to 16,336.71, and the S&P 500 lost about 0.12%, while the Nasdaq was slightly up 0.15%, to 4,313.478.
US markets declined 0.5% yesterday as commodity shares slumped with copper and oil prices amid concern over China’s economy. China announced an economic growth target of 7.5 % last week, its weakest since 1990, and had its first ever onshore bond default after a solar-panel maker failed to make an interest payment. The nation, the biggest consumer of everything from copper to soybeans, is scheduled to release industrial output data tomorrow after reports over the weekend showed the steepest drop in exports since 2009. The global markets will be paying close attention to those results, especially the Australians whose economy is linked to the manufacturing output of China via its natural resources.
According to a report released today by Bloomberg, about 70% of S&P 500 companies that reported earnings for the latest quarter beat analysts’ profit estimates. The S&P 500 has gained 1% this year, reaching a record close on March 7, after Federal Reserve Chair Janet Yellen said the US economy was strong enough to withstand measured reductions to the central bank’s monthly bond purchases. Three rounds of Fed stimulus have helped push the S&P 500 up 176% from a 12-year low, as US equities begin the sixth year of a bull market that started March 9, 2009. The Fed is trying to determine how much of recent economic cooling has been due to weather. The government’s monthly jobs report last week showed US employers added more workers than estimated in February.
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