Markets drop as Ukraine land war continues

Dow retreated 179, decliners over advancers 5-2 & NAZ slumped 224.  The MLP index went up 1 to the 209s & the REIT index barely rose 3+ to 466.  Junk bond funds slid lower & Treasuries continued to see more buying from nervous investors.  Oil jumped a very big 7+ to the 116s, the highest price since 2008, & gold surged 29 to 1969 (more below).

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Tech employees in Ukraine are pleading for tougher sanctions on Russia, saying lives are being lost by the minute.  "Force your governments and senators to act more severely," a JustAnswer employee, who wished to remain anonymous for safety, said.  "We do not have days or weeks to wait as they talk."  JustAnswer, an online question-&-answer service, has more than 200 employees who are now spread throughout Ukraine.  The Ukraine-based employees said that the situation is growing worse with "more and more victims among civilians."  Additionally, some small towns in the southeast part of the country, occupied by Russians, "are on the verge of a humanitarian catastrophe" as they go without food, water, gas & medical support.  "People are dying nonstop every single minute here," a JustAnswer employee said, as the largest land war in Europe since World War II continues to erupt around them.  "We are losing lives."  During his State of the Union speech, Pres Biden announced that the US was banning Russian flights from its airspace in retaliation for the invasion of Ukraine.  The day before his speech, the administration announced it was immediately blocking financial transactions of Russian central bank assets, which would effectively freeze any of those assets held by Americans.  Both moves top off a wide range of sanctions the US, Europe & other nations have imposed on Russia, specifically targeting Russian Pres Vladimir Putin, other members of Russia's security council, Russian banks, financial institutions & elites.  These sanctions caused the value of Russia's currency, the ruble, to plunge & were expected to hammer its economy.  "All we need is the world's support," an employee said.  Similarly, Ukraine President Volodymyr Zelenskyy wrote on Twitter that "today, more than ever, it is important for us to feel that we are not alone."

Ukraine tech employees plead for tougher sanctions on Russia

Small businesses will be facing growing challenges from inflation & higher wages, Chicago Federal Reserve Pres Charles Evans said.  Even with average earnings flattening out in Feb, Evans said he hears from smaller companies in his district about the challenges from cost increases.  “I think there are a lot of business models, especially for small businesses, that are going to be challenged for the future,” he added.  “They’re going to be asked to pay higher wages, and you know if inflation is going up, it’s the real wage that’s going to equate demand and supply.”  Evans spoke just after the Labor Dept's Bureau of Labor Statistics reported that the economy added 678K nonfarm jobs in Feb, which is considerably higher than expected.  The count also indicated that wages rose little over the month & were up 5.1% from a year ago, though that was less than expected.  Still, even that yearly level is well ahead of anything the economy experienced prior to the Covid pandemic & Evans said it will exert pressure.  The Fed's preferred inflation gauge shows that inflation, even excluding food & energy prices, is running at its fastest pace since the early 1980s.  “Wages are going to go up. If rents are going up, gas is going up, food costs are going up, and there are a lot of businesses where margins are very thin,” he said.  “Can they really survive that?”  Though Evans generally favors less-restrictive Fed policy, he said inflation has rendered the current stance, in which benchmark short-term rates are being held near zero, as “wrong-footed.”  As such, he likely will be among the majority of members this month to vote to raise rates a ¼-percentage point & continue to do so.  “Obviously, we need to be moving toward a more neutral monetary policy certainly by the end of the year, so that we’re within striking distance of taking a position that would deal more forcefully with inflation,” Evans continued.  “I have said ‘wrong-footed’ [on policy], and I think that’s the right term. It happened very quickly.”

Chicago Fed’s Charles Evans cautions on inflation’s hit to small businesses

More than 90% of the US population lives in area where they no longer need to wear facemasks, the Centers for Disease Control & Prevention (CDC) said.  The CDC issued new guidance last week that focuses on severe disease from Covid & hospitalizations when making recommendations on whether or not facemasks are needed.  The guidance is broken into 3 color-coded levels.  People in green & yellow counties, with low & medium C levels, respectively, do not need to wear masks.  However, people in yellow counties who are at high risk of severe illness from Covid should consult with their physician about whether they should wear a mask or take other precautions.  Everyone is still required by federal law to wear facemasks on planes, trains & other forms of public transportation.  The facemask requirement for planes expires Mar 18.  CDC officials have said they are reviewing whether or not the requirement is still necessary.  People in red counties with high Covid levels are recommended to wear masks indoors in public places regardless of vaccination status.  Less than 10% of the US population now lives in such counties, according to the CDC.  You can check the status of your county by visiting the CDC’s website.  The Covid omicron variant upended the US in Dec & Jan, causing an unprecedented level of infection.  However, new infections have plummeted & are now down more than 90% from a pandemic record in Jan.  The US reported an average of nearly 58K new infections on Wed, compared with the peak of more than 802K on Jan 15, according to data from Johns Hopkins University.  Hospitalizations are down 77% from the peak level during the omicron wave.  More than nearly 35K people were hospitalized with Covid yesterday, down from nearly 153K on Jan 20, according to data from the Health & Human Services Department.

More than 90% of U.S. population can ditch facemasks under CDC Covid guidance

Russian military forces took control of the Zaporizhzhia nuclear power plant in Ukraine & the world narrowly escaped a full-blown nuclear catastrophe in the process, US ambassador to the UN Linda Thomas-Greenfield said.  Thomas-Greenfield spoke at an emergency meeting of the UN Security Council just hours after Russian forces bombed & then seized the Zaporizhzhia plant, the largest nuclear power plant in Europe.  The foreign ministers of the G-7 group of developed economies issued a new joint statement condemning Russia's invasion of Ukraine, & pledged to impose more sanctions on Moscow & its ally Belarus unless the unprovoked assault was halted.

G-7 nations to impose more sanctions on Russia, Belarus; Ukraine’s Zelenskyy vows ‘we will win’

European markets closed sharply lower today after Russian forces attacked & seized control of Europe's largest nuclear power plant.  The pan-European Stoxx 600 closed down 3.6%, with banks plunging 6.7% to lead losses as all sectors & major bourses fell into negative territory.  For the week, the benchmark lost 7% & suffered its worst week since Mar 2020, the onset of the coronavirus pandemic.  A fire broke out at a training facility at Ukraine’s Zaporizhzhia nuclear power plant after an attack by Russian forces early today.  Ukraine's nuclear agency said Russian troops have now taken control of the facility.  Intl leaders have condemned the bombardment & UK. Prime Minister Boris Johnson told Ukrainian Pres Volodymyr Zelenskyy that he would call for an emergency UN Security Council meeting to discuss the attack.  Russia has been ratcheting up its assault on its neighbor in recent days, shelling major cities & advancing toward the capital city of Kyiv.  The invasion has drawn unprecedented economic sanctions from Western govs.

European stocks log worst week since March 2020, down 7%, as Ukraine war roils global markets

Gold futures climbed, posting a weekly gain of over 4%, as anxieties grew after the latest Russian assault in Ukraine saw it take over the country's largest nuclear power facility, following shelling that started a fire at the plant.  The attack on the nuclear plant is raising fears that Moscow's invasion of Ukraine is taking a more perilous turn in Eastern Europe.  Apr gold climbed $30 (1.6%) to settle at $1966 an ounce.  The precious metal saw a weekly rise of 4.2%, which was the largest weekly rise for a most-active contract since Jul 2020.  Apart from the geopolitical tensions, gold saw little reaction to the a monthly report on US employment from the Labor Dept released today.  The jobs data was the last before the Federal Reserve holds its next policy meeting, Mar 15-16.  Federal Reserve Chairman Jerome Powell said in congressional testimony this week that he would propose an increase of 25 basis points to benchmark Fed fund rates to combat rising inflation.

Gold futures up over 4% for week; palladium, copper at record highs

When a strong jobs report does not bring out stock buyers, the market is in serious trouble.  In the first week of Mar, Dow dropped 300 with a minor rally into the close.  As long as the war drags on, the bulls will be in hiding as more dreary news from the war front can be expected next week.

Dow Jones Industrials