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Saturday, October 1, 2022

US stocks end lower in a choppy session as investors monitor Ukraine-Russia war

At the closing, the Dow Jones Industrial Average dropped by 0.4% or 144 points at 33,773, while the Nasdaq Composite dipped 1.6% at 13,534, and the S&P 500 lost 0.6% at 4,361

4.05pm: Nasdaq drops 1.6%

US stocks ended in the red Thursday as investors monitored the latest developments in the Ukraine-Russia conflict as well as the hike in commodities prices which is likely to impact inflation and the expected Federal Reserve monetary policy.

At the closing, the Dow Jones Industrial Average dropped by 0.4% or 144 points at 33,773, while the Nasdaq Composite dipped 1.6% at 13,534, and the S&P 500 lost 0.6% at 4,361.

Major losers Thursday were Okta and Snowflake, both shedding 8% and 15.3%, respectively, after their quarterly earnings. Tesla shares plunged 4.6% while Amazon was down by 2.7%.

On the economic front, data on jobs will be released on Friday.

12.10pm: Markets turn lower

US stocks had reversed early gains by midday on Thursday as the week-long Russia-Ukraine conflict deepened even in the face of ceasefire talks, while the latest US non-manufacturing purchasing managers’ index (PMI) further highlighted inflationary pressures, pointing to a potential interest rate hike by the Federal Reserve later this month.   

Around noon, the Dow Jones Industrial Average was down by 101 points or 0.3% at 33,791, while the broader S&P 500 lost 0.4%, and the Nasdaq Composite shed 1%.

“Stock markets are back in the red again on Thursday, as we await further talks between delegations from Ukraine and Russia,” commented Craig Erlam, senior market analyst, UK and EMEA, OANDA. “Wednesday’s rebound was predictably short-lived against the backdrop of reports of intensifying attacks by Russian troops as they close in on cities across the country.”

Erlam noted that the sanctions that have been leveled at Russia since the invasion started have been far more severe than many expected “and we’re learning more about their devastating impact with every passing day.”

While there is some hope that talks between the two countries can yield a breakthrough, it’s tough to see where a compromise can be found or whether Russia is even interested in one, noted Erlam. “It was involved in talks before it crossed the border and it’s clear now that there was no intention to find a diplomatic solution,” he said.

On the economic front, the Institute of Supply Management’s (ISM) February non-manufacturing PMI proved disappointing, highlighting prevalent supply chain issues.

“The ISM non-manufacturing PMI came in at 56.5 in February against a forecast of 61.1. This weaker than expected reading shows the economy is still struggling with supply chain issues and employment continues to be an issue for businesses,” said Dan Boardman-Weston, CIO at BRI Wealth Management.

He added: “The key questions for investors and the Federal Reserve will be whether this weakness continues and how much of an impact the ongoing situation in Ukraine will have on the economy going forward.”

High levels of inflation and the ongoing conflict in Ukraine could cause economic weakness and cause the Fed to adopt less of a hawkish stance as we head through 2022, he noted: “Interest rates are going to rise from their current low levels but the question remains how quickly they will rise and what level they will get to.”

Until investors feel they have clarity on those questions, markets will continue to remain volatile.

11.08am: Proactive North America headlines:

Safe-T Group (NASDAQ:SFET) partners with The Center for Advanced Defense Studies for its Net Bridge social responsibility program

PlantX Life kicks off same-day delivery across Chicago and Plainfield, Illinois

Nevada Silver announces plans to raise $7.02M for exploration on Nevada land package

Kontrol Technologies says it will deliver energy management technology to leading Canadian REIT (TSX:REF.UN)

Snowline Gold looks ahead to “transformative” year as it celebrates its first anniversary as a public company

Altiplano Metals updates on exploration activities at its newly optioned Pastillas gold project in Chile

Silver Range Resources (AIM:RRL, ASX:RRS) says it has sampled high-grade gold and silver at Bellehelen property in Nevada

Dalrada Corporation announces appointment of Tom Giles as president of its newest division, Dalrada Energy Services

Love Pharma (CSE:LUV) says acquisition target Microdoz Therapy working on new study on psilocybin treatment in cannabis use disorder

Looking Glass Labs says House of Kibaa subsidiary partners with Polygon Studios on NFTs, scaling, and other infrastructure solutions

AIM ImmunoTech announces appointment of Robert Dickey IV, as its chief financial officer

Skye Bioscience partners with Novatech Heath Holdings for Phase I trial of glaucoma drug candidate

Victory Resources advances Smokey Lithium drilling program in Nevada

Wishpond Technologies announces launch of new e-mail marketing platform

Sassy Resources (CSE:SASY, OTCQB:SSYRF) expands Westmore gold-silver discovery with “highest grades yet” at its Foremore project in British Columbia

CULT Food Science announces inclusion into NYSE-listed exchange traded fund VegTech

SpotLite360 executes definitive agreement to acquire majority equity interest in E3 Service Group

Great Panther Mining says it is poised to return flagship Tucano mine to steady-state production in 2022, reports 4Q results

Golden Minerals hits more high-grade gold and silver at Yoquivo project in Mexico

Cabral Gold adds fifth drill rig at Cuiú Cuiú project to test regional targets

Hannam & Partners ups target price for Steppe Gold after news of resumption of full gold production from its ATO project in Mongolia

TraceSafe unveils strategic initiatives in energy management and decarbonization-as-a-service

Canada Silver Cobalt Works hits nickel, copper and cobalt mineralization in drilling at Graal property, Quebec

Wellbeing Digital Sciences (NEO:MEDI.AQN, OTCQB:KONEF) says IRP Health subsidiary wins approval from Veterans Affairs Canada for Reactivation program

Whitehorse Gold appoints Alex Zhang, a professional geoscientist, as a director; reveals change of chairman for its board

10.00am: Stocks higher as oil prices fall 

US stocks edged higher at the open Thursday as oil prices stabilized, falling from record highs, while investors eyed escalating conflict between Russia and Ukraine to gauge the impact of rising commodity prices on inflation and the expected Federal Reserve interest rate hike later this month.

In New York, the Dow Jones Industrial Average gained 238 points or 0.7% at 34,129, while the S&P 500 was up by 0.6%, and the tech-heavy Nasdaq Composite gained 0.3%.

Last week’s jobless claims totaled 215,000 from 233,000 Thursday, lower than estimated. The claims were down by 18,000 compared to the previous week and the lowest since January 1.

“Claims are headed back to the pre-Omicron lows in the wake of the collapse in cases and hospitalizations,” commented Ian Shepherdson, chief economist, Pantheon Macroeconomics on the jobless report. “The hit was substantial, though it likely was overstated as a result of seasonal adjustment problems, but we expect it to be fully reversed by the end of this month.” 

He noted that the demand for discretionary services is rebounding strongly, easing the pressure on businesses hit hard by people’s retreat from social activity when the variant emerged. “These data tell us nothing about tomorrow’s payroll report, but the renewed downward trend augurs well for March,” said Shepherdson.

 US crude oil prices had crossed $115 per barrel for the first time since 2008 before dropping to $108.31 a barrel. 

Among the gainers at the open were Apple, American Express, and Amgen, all up by more than 1.5% and boosting the markets. 

On the corporate front, shares of Best Buy went soaring by 8% after the company met its quarterly earnings expectations, while Kroger jumped 10% post earnings.

6.30am: Stock seen lower

US stocks are expected to edge lower in opening trade on Thursday as oil prices continue to bound higher as Russia’s invasion of Ukraine intensifies, with commodities price jumps likely to impact on inflation and the Federal Reserve’s monetary policy. 

After triple-digit gains in the previous session, the futures for the Dow Jones Industrial Average fell 0.2% on Thursday, while those for the S&P 500 lost 0.1% and contracts for the tech-laden Nasdaq-100 shed 0.4%.

Crude oil prices surged to over $115 a barrel for the first time since 2008, as the buying of Russian oil was shunned, reducing global supply. Investors are concerned that a prolonged elevation in oil prices could precede a combination of slowing growth and higher inflation, known as stagflation. 

Investors are worried about how this will feed into already elevated inflation levels and how aggressively central banks will raise interest rates when faced with additional price pressures and an uncertain economic outlook.

Federal Reserve Chairman Jerome Powell said in Congressional testimony on Wednesday that he would propose a quarter-percentage point rate increase at the central bank’s meeting in two weeks.

On the data front, the latest initial weekly US jobless numbers will be eyed today, although mostly as a pointer towards Friday’s always key monthly non-farm payrolls report.

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