Joe Mazzola, Director of Trader Education, Charles Schwab

(Thursday Market Open) Investors shifted into rally mode at the open, pushing US markets higher after Wednesday’s declines.

All three major indexes were higher as news emerged from Brussels ahead of an emergency NATO summit on Russia’s invasion of Ukraine. The war, along with the Federal Reserve’s battle to fight inflation, has dominated investor sentiment in recent sessions.

The yield on 10-year Treasury bills rose slightly and oil prices straddled $114 after Wednesday’s rally.

Market potential movers

Unemployment insurance claims have fallen to their lowest level since 1969 as the labor market continues to be on fire. Initial claims for the week ending March 19 were 187,000, down 28,000 from last week’s revised 215,000, the Labor Department said.

Durable goods orders fell 2.2% in February, down well above the expected decline of 0.5%, reversing the trend after four straight months of gains.

Core durable goods fell 0.6%; non-defense goods fell 2.7% and non-defence orders excluding aircraft contracted -0.3%.

Shares of Dard Restaurants (DRI) backtracked after the parent company of Olive Garden and other restaurants missed earnings expectations. Darden said guest numbers, staffing levels and costs were impacted by the omicron variant which spread across the country in the fourth quarter of 2021. However, the numbers are starting to improve, a said the company.

Spotify Technology (SPOT) shares were higher after the streaming service said subscribers will have easier access to subscriptions through the Google Play Store, thanks to a pact signed with Google’s parent company, Alphabet (GOOG).

Supply and labor issues remain challenging for homebuilders, including Knowledge base home (KBH), which missed earnings expectations and saw its shares tumble. Earnings for the three months ending February were $1.47 a share, up 44%, but missed Wall Street expectations of $0.10. Revenue increased 23% to $1.4 billion.

“While we grew our revenue by 23%, as the quarter progressed, supply chain issues intensified and an already limited construction workforce was stretched even further, which which has extended our construction timelines and delayed scheduled completions and deliveries,” said General Manager Jeffrey Mezger. call for earnings.

Market Minutes Review

Wednesday’s trading wiped out most of Tuesday’s gains as investors shifted gears amid growing concerns over rising oil prices and inflation as well as the further impact of the invasion of Ukraine by Russia.

WTI crude oil prices hit $114 a barrel – with some analysts forecasting $160 a barrel – as energy issues continue to challenge the United States and Europe. Compounding those problems, Russian officials said on Wednesday that damage from the storm had ruptured a pipeline, which could temporarily halt exports of nearly a million barrels a day. This would represent around 1% of global demand.

Inflation concerns are emerging as pump and grocery prices continue to climb. Members of the Federal Reserve speaking across the country this week reiterated their intention to continue raising rates after the 0.25 basis point hike earlier this month.

Given the rapid rise in prices, investors fear that increases of 0.50 basis points, as suggested by Fed Chairman Jerome Powell on Monday, may be just a one-time event in the years to come. to come.

Shares of Adobe (ADBE) fell nearly 10% after the software maker posted better-than-expected sales and profits, but warned the war in Ukraine could affect fiscal sales. On another side, GameStop (GME) prices climbed 10% as investors clawed back shares, following in the footsteps of Chairman Ryan Cohen. He said on Tuesday that his company landed 100,000 shares.

CHART OF THE DAY: OIL ON FIRE. WTI crude jumped to $114 a barrel on Wednesday in intense trading and rebounded there on Thursday as investors saw a growing imbalance of supply and demand amid Russia’s invasion of Ukraine . Additionally, Russian officials said a storm damaged a pipeline from Kazakhstan to the Black Sea, which could temporarily halt exports of around 1 million barrels per day. Data sources: ICE, S&P Dow Jones indices. Chart source: The thinkorswim® platform. For illustrative purposes only. Past performance does not guarantee future results.

Three things to watch out for

NATO MEETING: Ukrainian President Volodymyr Zelensky will address the emergency summit of NATO leaders on Thursday. His message: “Help”.

Zelensky has stepped up and received billions in aid from the United States and other allies, but the humanitarian toll in Ukraine is mounting and he needs more. At the same time, Zelensky is seeking increased military assistance and tougher sanctions against Russia that could further cripple its economy. Already there are reports of Russians queuing to buy food and household goods, a throwback to the Cold War era.

BIDEN SANCTIONS: Ukrainian Zelensky could very well get what he wants, at least from President Biden. National Security Advisor Jake Sullivan told reporters that Biden would announce new sanctions against Russia as well as actions to strengthen those already in place.

He is also expected to discuss longer-term adjustments to NATO forces and contingencies in case nuclear weapons are used, Reuters reported. A “joint action” is also on the agenda to help energy security in Europe, which is very dependent on Russian gas.

RUSSIA REOPENS THE STOCK MARKET: The first forecasts are not really brilliant. The markets have been closed since February 25, the day after the start of the Russian invasion of Ukraine. Russia’s main index plunged 33% and the challenge for Moscow was to avoid another free fall, according to published reports.

Russia’s central bank has limited trades to just 33 stocks out of 50 in the country’s benchmark index, MOEX. Trading hours were also limited to just four hours and 10 minutes, starting at 9:50 a.m. Moscow time.

Notable Calendar Items

March 24: Durable Goods Orders

March 25: Pending Home Sales, Retail Sales, Michigan Consumer Sentiment

March 28: Retail inventory

good trade,

Joe Mazzola

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