Dow dropped 311, decliners over advancers 2-1 & NAZ retreated 73. The MLP index slid back 1+ to the 197s & the REIT index was flattish in the 448s. Junk bond funds drifted lower & Treasuries saw limited selling which raised yields. Oil rose 1+ to the 93s & gold was off 2 to 1897.
AMJ (Alerian MLP index tracking fund)
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Germany is going to "reassess" the certification of the Nord Stream 2 pipeline in response to Russia's actions toward Ukraine, Chancellor Olaf Scholz said. The 764-mile pipeline that would carry natural gas from Russia to Germany has not begun operating. Nord Stream 2 is owned & operated by a wholly owned subsidiary of Russia state company Gazprom. Earlier this month, Pres Biden promised to "bring an end" to Nord Stream 2 if Russia invaded Ukraine. Scholz, appearing with Biden on his first official visit to DC, was far less explicit about stopping Nord Stream 2, but said that the US & Germany would have the same approach on punishing Russia financially. White House press secretary Jen Psaki tweeted that "we have been in close consultations with Germany overnight and welcome their announcement." The US will announce "our own measures today," Psaki added. Deputy Chair of Russia's Security Council Dmitry Medvedev warned that natural gas prices in Europe will rise because of Germany's decision. "Welcome to the brave new world where Europeans are very soon going to pay €2.000 for 1.000 cubic meters of natural gas!" Medvedev, a former Russia pres, tweeted. The Nord Stream 2 has seen a faster development & deployment despite sanctions placed on it by the Trump administration. With those sanctions removed, Germany remains keen to see the pipeline activated sooner rather than later. Scholz had insisted that the pipeline is a "business project."
Germany pulls plug on pipeline as Russian troops sighted in Ukraine
Federal Reserve governor Michelle Bowman said she had an open mind over whether the central bank should kick off interest-rate increases next month with a larger ½-percentage-point rate rise. Her comments follow remarks at the end of last week by 2 of the most senior Fed officials that pushed back against the prospect of a larger rate rise at their next meeting, Mar 15-16. "I intend to support prompt and decisive action to lower inflation," said Bowman. "I will be watching the data closely to judge the appropriate size of an increase at the March meeting." Since the Fed signaled at its meeting last month that it was prepared to raise interest rates next month for the first time in 4 years, economic data has pointed to stronger hiring, consumer spending & inflationary pressures. Those reports prompted investors in bond & interest-rate futures markets to place growing probabilities on a larger rate increase at the Fed's next meeting. The Fed typically raises rates in ¼-percentage-point increments & hasn't made a larger increase since 2000. Bowman said she supported the Fed's decision at its meeting last month to signal a need for higher interest rates & added that economic data since that meeting has "only increased the urgency to get on with the process" of raising interest rates & significantly reducing the size of the Fed's $9T asset portfolio. She expects additional rate increases would be warranted after the Fed's Mar meeting. Bowman expects current levels of "uncomfortably high inflation" will persist through the middle of this year & that she saw a substantial risk that high inflation would continue beyond that. An increasingly tight labor market, which didn’t sustain serious damage from the Omicron variant of the coronavirus, suggests wage pressures aren't likely to moderate soon, she noted.
Fed official leaves door open to larger rate increase in March
The UK has slapped targeted economic sanctions on 5 Russian banks & 3 wealthy individuals following Pres Vladimir Putin's decision to send troops into eastern Ukraine. Addressing lawmakers in the House of Commons, Prime Minister Boris Johnson said the first tranche of sanctions would target Rossiya, IS Bank, General Bank, Promsvyazbank & the Black Sea Bank. The measures would also sanction 3 "very high net worth" individuals: Gennady Timchenko, Boris Rotenberg & Igor Rotenberg. The individuals concerned will see their UK assets frozen & be banned from traveling to the country. All UK individuals and entities will also be barred from having dealings with them, he added. Johnson said the move to sanction Russia had arisen despite himself & several other world leaders giving Putin "every opportunity" to pursue his aims via diplomacy. "We will not give up," Johnson said. "We will continue to seek a diplomatic solution until the last possible moment but we have to face the possibility that none of our messages have been heeded and that Putin is implacably determined to go further in subjugating and tormenting Ukraine." He added, "This the first to be deployed alongside the United States and the European Union if the situation escalates still further." His comments come as EU lawmakers prepare to impose sanctions against Russian politicians, banks & to limit the ability of the Kremlin to access the bloc's capital, financial markets & services. A final decision on the EU's package of sanctions is expected later today.
UK announces first tranche of Russia sanctions, targets banks and wealthy individuals
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