Stocks closed mixed on Friday to close out the second straight week of gains as market participants continue digesting developments coming out of Russia’s war in Ukraine, new sanctions against Russia, and the path forward for interest rates after new, hawkish comments by Fed Chair Jerome Powell

Markets Today

  • S&P 500 (SPY): +0.48%
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  • Volatility Index (VIX): -3.55%
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In geopolitical news, the US and allies will expand sanctions against Russia in response to its unwarranted invasion of Ukraine. The new sanction target hundreds of members of the Russian parliament and the CEO of the largest bank in the country. Most significantly, the US Department of the Treasury warned that any gold-related transactions involving Russia may be sanctionable by US authorities. 

A senior administrator at the Treasury said, “Our purpose here is to methodically remove the benefits and privileges Russia once enjoyed as a participant in the international economic order.” As a reminder, Russia has already been expelled from the SWIFT international payment system, which essentially freezes banks from sending or receiving transactions. 

The initiatives come as President Joe Biden and NATO allies convene in Brussels for a series of summits to discuss the conflict.

Despite the ongoing geopolitical conflict and a chorus of Federal Reserve officials saying a $0.50 basis point hike may be necessary, stocks have remained relatively resilient.   Chicago Federal Reserve President Charles Evans said Thursday he was “open” to the notion of a 50 basis-point interest rate hike at a forthcoming Fed meeting if needed. This echoed remarks from other Fed policymakers including San Francisco Fed President Mary Daly, who said earlier this week that if the Fed needed to do 50 basis points, then “50 is what we’ll do.” Fed Chair Jerome Powell earlier this week also signaled a willingness to roll out a larger-than-typical 50-basis point rate hike to address inflation, if deemed necessary.

Highlights

  • The University of Michigan’s final consumer sentiment index for March fell to 59.4 from a preliminary reading of 59.7 and 62.8 in the prior month.
  • Pending home sales, which tracks the number of homes that are under contract to be sold, fell for the fourth straight month. The National Association of Realtors’ Pending Home Sales Index fell 5.4% year over year in February. Analysts had predicted a 1% increase
  • Salesforce (CRM) said it will change its legal name to Salesforce, Inc. from Salesforce.com, inc., effective April 4.
  • Bed Bath & Beyond (BBBY) is has reached a settlement with GameStop executive chairman Ryan Cohen. The deal will see three board members immediately added to Bed Bath & Beyond: Marjorie L. Bowen, Shelly C. Lombard, and Ben Rosenzweig. Cohen, founder of the online pet goods retailer Chewy, disclosed a 9.8% stake in Bed Bath & Beyond earlier in March.
  •  Apple has yet to fully comply with an order to open its App Store to rival forms of payment for dating apps in the Netherlands and faces another fine next week unless it tweaks its proposal, Dutch antitrust watchdog ACM said on Friday.
  • Apple has suspended its Apple Pay service for Russia’s Mir card payment system, Russia’s largest lender and payments system said on Friday, closing a loophole that had allowed Russians to keep using the service.
  • NIO stock fell roughly 10% after the company’s delivery guidance underperformed Wall Street expectations. 
  • BoFA now expects two hikes of 50 basis points each at the Fed’s June and July meetings with “risks” of those expectations being pulled forward into May and June respectively. “Our economists also now expect the Fed to keep hiking each meeting until they reach a 3-3.25% range in May ’23,” economists at the bank said. “This represents a 25 bps higher terminal rate achieved 7 months earlier vs previously forecast.”
  • Tesla Inc is recalling 947 vehicles in the United States because the rearview image may not immediately display when they begin to reverse, the National Highway Traffic Safety Administration (NHTSA) said.

“The future belongs to those who believe in the beauty of their dreams.” -Eleanor Roosevelt