Dow jumped 404, decliners modestly ahead of decliners & NAZ gained only 32. The MLP index dropped 3+ to 200 & the REIT index added 1 to the 458s. Junk bond funds were sold today & Treasuries saw a little selling, taking the yield on the 10 year Treasury up to 2.1% (more below). Oil plunged about 9 to just over 100 & gold tumbled 25 to 1959.
AMJ (Alerian MLP index tracking fund)
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The US won't negotiate exemptions to Ukraine-related sanctions on Russia to save the 2015 Iran nuclear deal & could try to strike a separate accord excluding Moscow, a senior US official said, a diplomatic effort complicated by an Iranian missile attack on Iraq that sent American troops rushing for shelter. With one of Pres Biden's top foreign-policy goals imperiled, the official said the US would start exploring alternatives to the deal over the next week if Russia didn't back away from its demands for written guarantees exempting Russia from Ukraine-related sanctions that could curtail its future trade with Iran. Such guarantees could undercut the West's punishing array of sanctions leveled at Russia over the Ukraine invasion. "I don’t see the scope for going beyond what is within the confines of the JCPOA," the official added, referring to the 2015 nuclear deal formally known as the Joint Comprehensive Plan of Action. "I think it’s pretty safe to say that there is no room for making exemptions beyond those." Meanwhile, Iran's top paramilitary force took responsibility for a missile attack yesterday on what it claimed were Israeli targets. It said the strike was in response to recent Israeli actions in the region, which included an airstrike last week in Syria that killed 2 of the group's commanders. The Iranian attack is likely to create more regional resistance to American efforts to strike a new nuclear containment deal with Iran. The US effort to resurrect the deal with Iran, which then-Pres Trump withdrew from in 2018, has drawn criticism from Israeli & Persian Gulf leaders who worry that it will allow Tehran to continue to arm allies across the region & carry out its own missile strikes with impunity.
US won’t negotiate Ukraine sanctions with Russia to save Iran nuclear deal
The 10-year Treasury yield hit 2.106%, its highest point since Jul 2019, with investors focused on the Russia-Ukraine war & the Federal Reserve's decision on interest rates. The yield on the benchmark 10-year Treasury note last jumped 9 basis points to 2.101% & the yield on the 30-year Treasury bond also rose 9 basis points to 2.454%. Yields move inversely to prices & 1 basis point is equal to 0.01%. Fighting intensified around the Ukrainian capital of Kyiv over the weekend, while Russian forces bombarded cities across the country, killing citizens who are unable to escape. Russia & Ukraine are set to resume peace talks today in a bid to establish a solid cease-fire. In addition to the war in Ukraine, investors will also be looking ahead to the outcome of the Federal Reserve's 2-day policy meeting, which starts tomorrow. The Fed is expected to announce on Wed that it will be raising its target funds rate by a qtr of a percentage point from zero.
10-year Treasury yield hits 2.1% — its highest point since July 2019
European stocks moved higher today ahead of further talks between Russian & Ukrainian negotiators. The pan-European Stoxx 600 was up 1%, with autos jumping 2.7% to lead gains while basic resources fell 2.1%. Global attention remains on the war in Ukraine after a weekend of intensified fighting around capital Kyiv, while Russian forces bombarded cities across the country, killing civilians who are unable to escape. Russia also attacked a Ukrainian military training center near the Polish border on Sun, killing 35 people & wounding 134. Sanctions continue to hit Russia hard with the financial fallout for Moscow's invasion expected to come into sharper focus in the coming days ahead of a scheduled sovereign bond payment. Talks are taking place again in a bid to establish a solid ceasefire & find room for any compromise between Russia & Ukraine's demands, although previous discussions have ended in failure. The Federal Reserve is also in focus this week as it is expected to raise its target fed funds rate by a qtr percentage point on Wed. Investors are also looking to the central bank for its new forecasts for rates, inflation & the economy, given the uncertainty from escalated geopolitical tensions.
European markets climb amid renewed hopes for Ukraine-Russia talks
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