Markets Around the World Are Falling as Russia Bombs Kyiv, Tanks Cross Border

Oil Hits $100/bbl for the first time since 2014

putin address

Russia's attack on Ukraine last night—including aerial bombing of the capital Kyiv as well as tank and troop invasions—hit global stock markets hard. Europe's STOXX 600 index slid more than 3%, to its lowest level of the year, and Germany’s DAX lost over 4%. In Asia, Hong Kong’s Hang Seng index fell over 3% and Japan’s Nikkei index was down nearly 2%. 

In the U.S., the Nasdaq, Dow, and S&P are all down between 1% and 2%. Oil prices surged past $100 a barrel for the first time since 2014.

U.S. and European leaders promised swift financial retaliation in the form of sanctions hitting banking, energy, and individuals. The yield on the 10-year Treasury note fell to 1.86% as investors bought bonds as a safe haven investment. U.S. President Joe Biden is scheduled to speak with G7 leaders today about the latest developments and will address the American public afterwards, at 12:30pm.

Key Takeaways

  • Russia's attack on Ukraine shocked the world, sending oil past $100 a barrel and hammering global stock markets.
  • The yield on the 10-year Treasury note fell to 1.86%, and prices jumped, as investors bought bonds as a safe haven investment.
  • Europe's Stoxx 60 index fell more than 3% and Germany's DAX lost more than 4%.

Russia's Moex stock index plummeted, losing more than 30% and the ruble sank against the dollar. The euro also weakened.

Palladium prices rose, driven by fears of a hit to supply from top producer Russia, while gold prices gained over 3% to nearly $2,000 an ounce. Oil prices crossed $100 a barrel for the first time since 2014 on concerns about a potential disruption of supplies. Natural gas, supplied by Russia to much of Europe, also soared. 

Investors' appetite for risk plummeted after Putin announced he would move forward with a military operation, with all major cryptocurrencies trading lower. The price of Bitcoin dropped more than 7% and now sits below $35,000. 

The Labor Department reported initial claims for state unemployment benefits decreased by 17,000 to a seasonally adjusted 232,000 for the week ended Feb. 19, fewer than economists anticipated. Meanwhile, the Bureau of Economic Analysis released its second estimate of 4th quarter GDP growth, showing the U.S. economy grew at an annualized rate of 7% last quarter, slightly above its previous estimate. 

Companies reporting earnings today include Coinbase Global Inc. (COIN), Etsy Inc. (ETSY), and Block Inc (SQ). Moderna Inc. (MRNA) shares jumped after the company reported profit that beat analysts' estimates. Anheuser-Busch InBev SA (BUD) and Alibaba Group Holding Ltd. (BABA) shares fell on disappointing earnings.

Quick Hits: Today's Headlines

Shares of eBay Inc. (EBAY) are sinking after the company released disappointing earnings guidance. The online marketplace reported better-than-expected earnings for the fourth quarter, but annual active buyers declined during the quarter to 147 million, below expectations of 156 million.

The Biden administration outlined a number of federal measures to strengthen transportation logistics and infrastructure. The recommendations are aimed at improving the flow of goods from ports, investing in roads, and increasing domestic shipbuilding, among other goals. 

Ford Motor Co. (F) CEO Jim Farley says the automaker has no plans to spin off its electric vehicle business. His comments come after reports that he had wanted to separate the EV business from its internal combustion engine business to unlock the value of the electric vehicles business.

Shares of Allbirds Inc. (BIRD) are falling after the sneaker maker reported widening losses, despite a 23% jump in sales. The company said mounting costs in the fourth quarter weighed on profits.

A federal labor board postponed a scheduled union vote count at three Starbucks Corp. (SBUX) locations in Buffalo, New York. The National Labor Relations Board has not yet ruled on an appeal by Starbucks, leading the board to postpone.

The Big Story: Small Business Struggles

Small businesses continue to struggle with the impact of the pandemic, even as virus cases drop dramatically, with 77% of small businesses surveyed by the Federal Reserve continuing to experience negative impacts from the pandemic.  

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The survey found that more than half of firms reported being in fair or poor financial condition, with smaller firms, and businesses in the leisure and hospitality industry among the most likely to be affected. Half of the firms surveyed in the leisure and hospitality industry reported large negative effects from the pandemic, while only 26% of manufacturing firms reported a negative effect.

Hiring and retaining qualified staff, and navigating supply chain issues continue to be the top operational challenges facing small businesses. The Fed polled nearly 11,000 small employers across the country that have less than 500 workers.

Expectations for future revenue and employment growth have improved since 2020 but remain below pre-pandemic levels. Just over half of the firms surveyed by the Fed expect revenues to rise, and 41% anticipate employment growth in the next 12 months.

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