Stocks kept pushing higher, extending earlier gains amid reports that Russia promised to scale down its military operations around Kyiv and northern Ukraine and a new economic report which showed consumer confidence unexpectedly rise in March despite the fastest pace of inflation in forty years. 

Markets Today

  • S&P 500 (SPY): +1.23%
  • Nasdaq (QQQ): +1.72%
  • Dow Jones (DIA): +0.98%
  • Russell 2000 (IWM): +2.67%
  • Volatility Index (VIX): -3.67%
  • Apple (AAPL): +1.91%
  • Gamestop (GME): -5.11%
  • Shopify (SHOP): +6.04%
  • Block (SQ): +6.31%
  • Robinhood (HOOD): +23.58%
  • Nielsen (NLSN): +20.22%
  • Dave (DAVE): +25.31%
  • Ginkgo Bioworks (DNA): +23.53%

Sign up and receive the Recap in your inbox FREE everyday…

Free Newsletter

The market spiked higher this morning after Russia reportedly decided to “dramatically” scale back its military operations in the Kyiv area, a top Moscow defense ministry official said following a fresh round of peace talks with Ukrainian counterparts in Istanbul. Alexander Fomin, Russia’s deputy defense minister, said the move was intended to “increase mutual trust” as he announced it in Turkey after face-to-face talks concluded on Tuesday.

But western officials cautioned against taking Moscow’s pledge at face value. “Nothing we have seen so far suggests that Putin and his colleagues are particularly serious about the talks. They are likely just playing for time,” said one.  President Biden said he wouldn’t “read anything into Russia’s decision.”

U.S. consumer confidence unexpectedly edged up in March, suggesting solid job growth offset Americans’ concerns over decades-high inflation that poses the biggest risk to the economy as we continue recovering from the COVID-induced recession. 

The Conference Board’s index increased to 107.2 from a downwardly revised 105.7 reading in February, which was the lowest in a year, according to the group’s report Tuesday. The median forecast in a Bloomberg survey of economists called for a reading of 107.

The report shows that steady labor market gains have pushed employment back to pre-pandemic levels in some sectors, buoying U.S. households. The economy probably added close to a half-million jobs in March (official report due later this year) as the unemployment rate fell to 3.7%. 

But the short-term outlook among Americans reflects less optimism around what’s ahead. The expectations index component of the report dropped to 76.6 from 80.8 in February. Respondents cited inflation — particularly higher gas prices — and the war in Ukraine as the biggest factors weighing on their outlook.

“Consumer confidence continues to be supported by strong employment growth and thus has been holding up remarkably well despite geopolitical uncertainties and expectations for inflation over the next 12 months,” said Lynn Franco, The Conference Board’s senior director of economic indicators.

Meanwhile, oil prices tanked on Monday after Shanghai implemented a lockdown to curb a surge in COVID-19 infections, renewing fears of a slowdown in demand. WTI Crude Oil futures (CL=F) plunged 9.2% to settle at around $103 per barrel, recording their biggest drop in two weeks.

Later this week, the Bureau of Labor Statistics is set to release the March job report, which will give a clearer picture of the state of the labor market in the US. Labor market tightness is a strong influence on the Fed’s decision to begin tightening monetary policy, with historically low levels of unemployment coupled with a record number of job openings suggesting the economy is strong enough to absorb these hikes. The report is likely to show another robust reading with payrolls expected to rise by 490,000, according to Bloomberg economist estimates.

Christopher Rupkey, Chief Economist at FWDBONDS, said “The payroll jobs report could be the biggest one yet in this recovery from the pandemic. “Federal Reserve officials are already chomping at the bit for bigger 50 bps rate hikes at upcoming meetings, and the tightest labor market since the 1960s is like pouring gasoline on the fire were any policy official worth his or her salt is burning with desire to get interest rates up to 2% neutral levels now. 

In other economic news,  is a fresh read on the monthly personal consumption expenditures (PCE) due Thursday. The gauge is another indicator of how quickly prices are increasing across the country. Consensus economists expect the PCE to post a rise of another 0.6% in February, according to Bloomberg data. Core PCE, which is the measure the Fed uses to conduct monetary policy, is also expected to show a 0.3% month-over-month increase to 5.5%. 

Highlights

  • Workers at a Starbucks store in Knoxville, Tennessee voted 8-7 to form a union on Tuesday, becoming the first store in the South to unionize, a spokesperson for SB Workers United said.
  •  Meta said on Tuesday it was suspending plans to build a giant data center in the Netherlands, following political opposition. The move comes a week after the Dutch Senate passed a motion asking Prime Minister Mark Rutte’s government to “use its powers” to temporarily block construction of the site in the northern town of Zeewolde, 50 km east of Amsterdam.
  • The U.S. Transportation Department on Friday plans to unveil revised tougher fuel economy requirements reversing the prior administration’s rollback, officials said.
  • Shanghai’s COVID lockdown roiled auto production on Tuesday as a major supplier joined Tesla (TSLA) in shutting a plant to comply with the measures to control the spread of the virus.
  • The U.S. Securities and Exchange Commission (SEC) may recommend new directives governing special purpose acquisition (SPACs), or “blank check,” companies at its open meeting on Wednesday, according to an agenda released by the regulator.
  • Bloomberg data showed the yield on the 10-year U.S. Treasury note briefly dipping below the yield on the 2-year U.S. Treasury at 1:33 p.m. ET on Tuesday afternoon.
  • Philadelphia Federal Reserve President Patrick Harker said he favors a “methodical” series of quarter-percentage-point interest rate increases but is open to more aggressive half-point hikes if inflationary pressures persist.
  • Apple Inc. (AAPL) shares climbed in early trading, positioning the tech giant back on track for its longest streak of daily gains since 2003 before the iPhone was even launched. The advance reflects $430 billion in added market value over, bigger than the size of Walmart (WMT).
  • The Labor Department said in its Job Openings and Labor Turnover Summary (JOLTS) on Tuesday that openings totaled 11.266 million in February. This figure follows 11.283 million vacancies in January, according to the Labor Department’s revised figure. Economists surveyed by Bloomberg were looking for 11.000 million job openings last month.

“You have brains in your head. You have feet in your shoes. You can steer yourself any direction you choose.” -Dr. Seuss