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Wealth Daily 07 March 2022

WEALTH DAILY 2022-03-07
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Over the weekend, US Secretary of State Antony Blinken said that the US and its allies are considering banning Russian oil and natural gas imports. In early trading this morning (Mon), the front-month (May) Brent crude oil future has jumped 9% to over US$128/bbl, the highest price seen since 2008.

On Fri, the front-month Brent and WTI futures closed up $7.65 at US$118.11/bbl and $8.01 at US$115.68/bbl respectively

 US equity index futures are falling this morning in response to the higher energy prices. Dow futures have lost 330 points, or 0.9%, while S&P 500 futures and Nasdaq 100 futures are down 1.3% and 1.7%, respectively.

Traders might be concerned about more than just the price of oil. They are buying gold, a typical safe haven in times of crisis. The most actively traded US gold futures (Apr) contract is up more than $25 to above US$1,992/oz. On Fri, gold had settled up $30.70, or 1.6%, at US$1,966.60/oz.

Declines in US equities today (Mon) will add to losses made on Fri. On Fri, the Dow Jones Industrial Average lost 179.86 pts or 0.53% lower to close at 33,614.80. The broader S&P 500 index fell 0.79%. The tech-heavy Nasdaq Composite retreated 1.66%. The small cap Russell 2000 dropped 1.55%.

 US megacap tech stocks closed lower on Fri, including Microsoft (MSFT US, - 2.05%), Apple (AAPL US, -1.84%), Alphabet (GOOGL US, -1.49%), Amazon (AMZN US, -1.53%) and Meta Platforms (FB US, -1.43%). Cryptocurrencylinked stocks slumped as Bitcoin (XBTUSD) fell 6.42% to US$39,393.70 on Fri.

 US Treasuries rallied on Fri on safe-haven buying, sending yields lower. The yield on the 10-year Treasury note slipped 10.97 basis points (bps) to 1.7307%

The US dollar is also a typical safe-haven investment. The ICE dollar index (DXY), which measures the strength of the greenback against a basket of currencies, rose 0.88% to 98.648. The greenback hit the highest since 2020.

On Fri, the UK FTSE lost 3.48%, France's CAC 40 fell 4.97%, while the German DAX retreated 4.41%.