US stock index futures traded in a slight downside on Thursday after the Kremlin sharply condemned media reports about progress in peace talks on Ukraine. However, after yesterday's upward rally, this downward movement looks more like a correction. The S&P 500 index fell by 0.2%, but then recovered slightly, the high-tech Nasdaq also fell by 0.25%. Industrial Dow Jones futures were the least exposed to volatility and fell only 0.15%.
Today, Kremlin spokesman Dmitry Peskov denied reports that the warring parties are approaching a settlement of the conflict, accusing Kyiv of slowing down negotiations. However, traders reacted to this news quite calmly, continuing to believe in a new upward rally, which everyone is waiting for this spring.
With a smoother landing of the economy after two years of serious stimulus, it seems that the Federal Reserve System is doing pretty well. Now I would like to cope with inflation, which can cancel all plans. Yesterday, the Fed raised interest rates by a quarter of a percentage point and signaled plans to raise it at all six remaining meetings in 2022. It is predicted that by the end of 2023, the rate will be at the level of 2.8%. Fed Chairman Jerome Powell assured that the fight against inflation will not lead to a recession in the economy. Raising rates by a quarter-point for the first time since 2018 and signaling six more increases this year, Powell told reporters that inflation is too high, the labor market is overheated, and price stability is now the most important goal for the Central Bank. The Fed also said that it would begin to allow its balance sheet to be reduced by $8.9 trillion, but did not go into details on this issue. For more details, see the material: The Federal Reserve has raised interest rates by a quarter of a percentage point.
The leveling of the yield curve on US bonds contributes to the growth of the market, as well as the fact that WTI crude oil fell sharply to $ 100 per barrel in three days, but it was not possible to gain a foothold below this range. Brent continues to trade confidently above $ 100 per barrel. Only a drop in WTI below the level of $ 100 can save the US economy from recession, otherwise, high energy prices will lead to an even greater increase in inflationary pressure in the country, which will completely slow down the development of the economy.
Russia's default was avoided
The Russian Finance Ministry said today that an interest payment of $117 million on debt obligations was made to Citibank in London, which stopped speculation that the country is heading for default. Against this background, the Russian ruble rose for the sixth day in a row, but the country's stock market remains closed.
As for the American premarket:
Dollar General securities rose 5% in the premarket after the retailer predicted higher-than-expected sales for the full year. Dollar General's quarterly profit of $2.57 per share was in line with economists' forecasts, although revenue was slightly below estimates.
Guess reported adjusted quarterly earnings of $1.14 per share, one cent below estimates. The clothing manufacturer's revenue also fell short of analysts' forecasts. However, the earnings figures were better than expected and the stock jumped 4.9% in premarket trading.
Shares of jewelry retailer Signet Jewelers rose 7.4% in premarket trading after the publication of quarterly results. Signet's adjusted earnings of $5.01 per share matched analysts' forecasts, and same-store revenue and sales beat estimates.
As for the technical picture of the S&P 500
The prospects are quite good, but it is necessary to stay above $4,319 today, which will not be so easy to do. Bulls will probably try to continue their growth today, which will lead to an update of $4,383. Going beyond this level will open a direct path for the trading instrument to the highs: $4,433 and $4,488. If there are no particularly willing buyers around $4,319, a breakdown of this range can quickly bring the index down to the lows: $4,265 and $4,216, after which the bulls will have to start all over again.