US stocks fell and energy prices rose on Monday after the escalation of sanctions against Russia amid an ongoing conflict in Ukraine, adding to further uncertainty about the future of global financial markets.
The S&P 500, Dow and Nasdaq are all down. Intermediate crude oil prices in West TexasCL = F.) to as much as $99.10 a barrel before paring some of the gains. Brent crude (BZ = F.), the international benchmark, to a seven-year high of more than $104 a barrel. Gold prices jumped while Treasury yields fell as investors piled into safe haven assets.
Monday’s market moves came after a tumultuous weekend of fighting in Ukraine as Russia continued its attacks. A new set of sanctions criticized Russia as major Western nations responded to the invasion. And the news of it Russian President Vladimir Putin has put the country’s nuclear deterrent forces on high alert Added to the tension in global financial markets.
United States, European Commission, France, Germany, Italy, United Kingdom and Canada On Saturday, he issued a joint statement of approval To exclude some of the major Russian banks from the SWIFT messaging system, which helps facilitate transactions for trillions of dollars globally. The United States also said on Monday that it is banning Americans from dealing with the Central Bank of the Russian Federation, The National Wealth Fund of Russian Federations and the Ministry of Finance of the Russian Federation.
Banning Swift banks will “make it more difficult (though not impossible) for these institutions to make cross-border payments,” Neil Schering, chief economist at Capital Economics, wrote in a note Monday. “So far at least the West has not gone so far as to impose a ban on energy imports from Russia, which would be the strongest sanctions they could apply.”
“At the same time, the United States, the European Union, the United Kingdom and Canada announced sanctions against the Russian Central Bank,” Schering added. “Perhaps this is an even more important step because it will significantly reduce the ability of the CBR to liquidate its foreign assets to prop up the ruble and help Russian companies service liabilities denominated in foreign currencies. About 40% of Russia’s international reserves are held in the financial systems of countries that have signed these sanctions.”
The latest sanctions imposed by the West add to a raft of sanctions imposed on major Russian financial institutions, sovereign debt and key officials last week. The ruble opened about 30% lower against the dollar in offshore trade, and Russia’s central bank more than doubled its benchmark interest rate to a two-decade high of 20% in a move to try to help counter currency depreciation.
“While market fundamentals in the US have deteriorated very slightly, sentiment-driven concerns are unlikely to change anytime soon. From a market perspective, sanctions against Russia are likely to have the most impact on currency markets, including the ruble, euro and euro-dollar , David Bansen, chief investment officer of the Bahnsen Group, wrote in an email Monday morning.
Investors are still closely watching for further repercussions on financial markets and global companies. Automakers including Volkswagen, Renault and Finnish tire maker Nokian Tires Late last week, they were halting or changing production due to disruptions and shortages in the supply chain Exacerbated by the Russian invasion of Ukraine. While the sanctions have stopped short of curbing energy exports from Russia, the world’s third-largest oil producer, traders have remained on alert for any direct or indirect impact of the geopolitical conflict on the already tight global energy markets.
“We still believe that the overall impact on global supply chains will be relatively small, but the expulsion of some Russian banks from the SWIFT system means that non-energy trade between Russia and Europe is likely to decline,” said Schering of Capital Economics. “Attacks on infrastructure that transports gas to Western Europe could raise prices further and increase inflation pressure. Additional sanctions could lead to retaliation from Russia, which could cut energy imports into Western Europe.”
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11:09AM ET: Bitcoin price surpasses $40K, hitting its highest level since mid-February
Bitcoin (BTC-USD) dumped the volatility seen in other risk assets and jumped on Monday, up nearly 4% to $40,000.
The largest cryptocurrency by market capitalization reached more than $41,000 after 11 a.m. in New York, according to Yahoo Finance data. This was the highest level since February 17th.
The move came amid a surge in ruble-denominated cryptocurrency trading volume, as many are rushing to get their money out of the Russian currency as sanctions from major Western countries escalate. According to CoinDesk, The size of the bitcoin in rubles It recently reached its highest level in 9 months.
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10:11 a.m. ET: US goods trade gap yawns to an all-time high as imports hit a record
The US goods trade deficit rose to a record high in January after the value of imports jumped further as companies sought to meet rising consumer demand.
The trade deficit reached $107.6 billion at the beginning of 2022, The Commerce Department said on Monday. That was more than the $99.5 billion economists had expected, according to Bloomberg data, and increased the goods trade deficit of $100.5 billion from December.
Imports rose by $4.4 billion in January compared to December to $262.5 billion – also a record. Meanwhile, exports fell by $2.8 billion, declining to $154.8 billion in January.
Almost all categories of merchandise recorded an increase in imports during the month. On a percentage basis, Food, Feed and Beverage saw the largest jump at 8.6%, increasing in value to $17 billion. Industrial supplies and capital goods imports rose about 2%, to nearly $62 billion and $69 billion, respectively.
The 12.5% drop in consumer goods exports contributed significantly to the overall contraction in January exports. Exports or auto vehicles and industry supplies also declined.
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9:31AM ET: Stocks open lower
Here’s where the markets traded after the opening bell on Monday morning:
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Standard & Poor’s 500 (^ Salafist Group for Preaching and Combat): -48.34 (-1.1%) to 4,336.31
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dow (^ DJI): -471.26 (-1.38%) to 33587.49
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Nasdaq (^ ninth): -89.64 (-0.67%) to 13603.10
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raw (CL = F.): +$3.57 (+3.9%) to $95.16 per barrel
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gold (GC = F.): + $29.60 (+1.57%) to $1.917.20 per ounce
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Treasury for 10 years (^ degeneration): -9.7 basis points to produce 1.887%
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7:55 a.m. ET Monday: Stock futures plunge with Russian invasion, sanctions escalate
Here are the main moves in the markets on Monday morning:
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S&P 500 futures contracts (ES = F.): -45 points (-1.03%) to 4,335.00
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Dow futures contractsYM = F.): -304 points (-0.89%) to 33,690.00
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Nasdaq futures contractsNQ = F.): -136.25 points (-0.96%) to 14,044.25
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raw (CL = F.): + 4.14 dollars (+ 4.52%) to 95.73 dollars per barrel
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gold (GC = F.): + $23.20 (+1.23%) to $1,910.80 per ounce
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter
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