Frankfurt – 24/02/2022
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Suppose you only pay attention to and believe the mainstream media. In that case, it seems that we are in a terrible situation: Russia launches a military operation in Ukraine and thus starts a war. But it gets more interesting if you also look at alternative and local media for data analysis.
It so coincides that the whole theatre around Ukraine, but also still inflation, etc., gave the stock markets a wild ride today. The situation becomes exciting and even mind-blowing when one sees that several assets, such as the Dow Jones Industrial, S&P500, gold, oil and also Bitcoin, made exact Fibonacci corrections today. And not just roughly, but precise telemark landings. Technical analysis is and remains our friend.
In Moscow, the stock market even crashed: the leading index RTS experienced a record price drop of a good 40 per cent. It slid to its lowest level in six years. The Russian rouble fell to a record low at its peak.
US Markets at a glance
Russian operations in Ukraine only temporarily weighed on Wall Street on Thursday. After a weak start, the Dow Jones finally made it into the profit zone late in the day and closed 0.28 per cent higher at 33,222.88 points. In contrast, the tech stocks index NASDAQ Composite managed to reach green territory earlier – the tech stocks index closed 3.34 per cent higher at 13,473.59 points.
In the West, the alleged Russian invasion is strongly condemned as a breach of international law. US President Joe Biden has already threatened Moscow with sanctions, and the EU summit also agreed in the evening on further sanctions against Russia.
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Observers explained that the US stock markets ultimately rose because investors speculated that the US Federal Reserve would be less aggressive in its planned interest rate hikes to mitigate any economic damage caused by the events in Ukraine. In addition, US President Joe Biden announced new sanctions against Russia and the deployment of more soldiers to Germany. This, strangely enough, gave additional fuel to the recovery movement.
Far East Markets at a glance
The Asian markets were significantly lower in Thursday trading and were therefore not yet able to benefit from the recovery movement from overseas. In Tokyo, the Japanese benchmark index Nikkei fell 1.81 per cent to 25,970.82 points by the end of Thursday trading, while the Shanghai Composite was 1.70 per cent lighter at 3,429.96 units. Meanwhile, the Hang Seng in Hong Kong slumped 3.21 per cent to 22,901.56 points.
The Russia-Ukraine conflict has reached a new dimension, with Russia’s President Putin launching a military operation in Ukraine. “I have decided to launch a military operation,” Putin said in a televised address. He called on Ukraine’s military to “lay down their arms”.
European Markets at a glance
The European markets literally collapsed on this dark trading day. The EuroSTOXX 50 significantly increased its early loss in the further trading course and closed 3.63 per cent weaker at 3,829.06 points.
The DAX had already crashed at the start of trading and even temporarily broke through the 14,000 mark. Intraday, the German benchmark index remained deeply in the red and ultimately closed 3.96 per cent weaker at 14,052.10 points. The TecDAX showed the same tendency. It was also able to limit its initial losses somewhat, but it also ended trading significantly lighter, with a discount of 1.45 per cent at 3,093.29 index points.
The Russia-Ukraine crisis caused great turmoil in the European stock markets as well. “Even if the valuation is slowly becoming attractive for very long-term investors, there is still no end in sight in the short term,” one market participant told Dow Jones Newswires. “On the one hand, you now have to wait and see where Putin stops, and on the other hand, what the reaction of the West will be,” he said and continued: “On the other hand, the open war also clouds the environment further.”
Forex, gold, oil and crypto
Again, the US dollar was in demand on the foreign exchange markets. The dollar index, which reflects the exchange rate of important currencies, jumped by one per cent. The euro slipped below the 1.12 dollar mark for the first time since the end of January and cost only 1.1163 dollars in the afternoon. Traditionally, the dollar is in demand in times of crisis, as is the Japanese yen.
After the news from Russia was reported, commodity prices rose sharply. The oil price rose above the 100 dollars per barrel mark for the first time since 2014. Brent crude from the North Sea rose by up to nine per cent to 105.79 dollars a barrel and marked a seven-and-a-half-year high. The price melted to 99.02 dollars in late trading, while WTI oil was sold for $94 per barrel. European natural gas futures jumped by up to 42 per cent to 120 euros per megawatt-hour.
Gold, the precious yellow metal, had an even wilder ride. After temporarily rising to $1.973, the price then crashed down to $1.880. At the close, the ounce was back at $1.904 an ounce.
Cryptocurrencies remained volatile as well, dropping at first but recovering sharply closer to the end of the trading day. Bitcoin eventually rose back to $38,300, a daily gain of almost 4 per cent. Ethereum added 1.1 per cent to $2,600 while Solana rose by 4.5 per cent to $89. XRP and Cardano also retraced after sliding deep in the red, closing almost unchanged at $0.70 and $0.86, respectively.
Corporate and world economic news
Economic data
Economic activity in the USA strengthened in January. According to the Federal Reserve Bank of Chicago, the Chicago Fed National Activity Index (CFNAI) rose to plus 0.69 points. The more meaningful three-month moving average deteriorated to plus 0.42 in January, and a revised reading of plus 0.46 was reported for December, after a previously reported reading of plus 0.33.
In the USA, the situation in the labour market has improved more than expected. Last week, the number of initial weekly claims for unemployment benefits fell by 17,000 to 232,000, as the Labour Department announced in Washington on Thursday. On average, analysts had expected a decline to 235,000 applications.
Steff has been actively researching the financial services, trading and Forex industries for several years.
While putting numerous brokers and providers to the test, he understood that the markets and offers can be very different, complex and often confusing. This lead him to do exhaustive research and provide the best information for the average Joe trader.