Wall Street looks set to snap a four-day losing streak Wednesday as investors swoop back in to beaten-down global stocks amid an overnight easing in oil prices.
U.S. equity futures powered higher Wednesday, while crude prices eased and Treasury bond yields crept north, as investors looked to add beaten-down stocks following last night’s close in correction territory for major American indices.
Headline risk from the war in Ukraine, where Russian forces continue their march towards the capital Kyiv as fighting enters its thirteenth day, remains elevated, however, as does the ongoing financial impact linked to scores of corporate boycotts, a U.S. ban on Russian energy exports and a warning from Fitch Ratings that the Russian government could be close to an ‘imminent’ default of some of its debt as a result of sanctions placed on its central bank’s access to U.S. dollar reserves.
Ukrainian President Volodymyr Zelenskiy called on the international community to enforce a ‘no-fly’ zone in order to prevent what he called a “humanitarian catastrophe” in the region, while reports suggest the country’s state-backed power grid has been disconnected from the nuclear plant in Zaporizhzhia as a result of Russian attacks.
A pullback in global oil prices, following yesterday’s comprehensive ban on Russian energy imports from President Joe Biden, looks to have helped bullish sentiment Wednesday, as investors eye a plethora of U.S. stocks trading in correction territory — a figure that represents a 10% fall from a recent peak — and an easing in the CBOE Group’s benchmark VIX volatility gauge.
WTI futures for April delivery were marked $3.37 lower at $120.33 per barrel while Brent contracts for May fell $3.42 to $124.49 per barrel during London trading.
Investors will be closely tracking data from the Energy Department, expected at 10:30 am Eastern time that will detail the state of domestic crude stockpiles. Last week’s data showed inventories in the Strategic Petroleum Reserve as the lowest levels since 2002, with overall stockpiles holding at the levels last seen in 2014.
In the meantime, U.S. gas prices are holding at record highs, with Gasbuddy.com, a consumer-focused website, reporting a national average of $4.26 per gallon.
In U.S. markets, futures contracts linked to the Dow Jones Industrial Average are indicating a 460 point opening bell gain while those linked to the S&P 500, which is down 12.5% for the year, are priced for a 65 point surge.
Nasdaq Composite futures are indicating a solid 255 point gain, although the advance is again limited by the ongoing rise in 10-year Treasury note yields, which hovered just over 1.9% in overnight trading.
In terms of individual stocks, shares in the online match-making app Bumble (BMBL) – Get Bumble, Inc. Class A Report surged after it posted stronger-than-expected fourth quarter earnings while announcing it will cease offerings services in Russia and Belarus.
Stitch Fix (SFIX) – Get Stitch Fix, Inc. Class A Report shares, however, plunged 23% after the online fashion retailer posted a wider-than-expected second quarter loss and cautioned that sales would likely decline from last year as shopping habits continue to evolve following the lifting of pandemic era restrictions.
Activision (ATVI) – Get Activision Blizzard, Inc. Report and Microsoft (MSFT) – Get Microsoft Corporation Report may also be in focus after the Wall Street Journal reported that the U.S. Department of Justice, as well as the Securities and Exchange Commission, is investigating three entertainment industry executives over potential insider trading violations linked to the tech giant’s $68 billion takeover of the Call of Duty videogame maker.
In overseas markets, Europe’s Stoxx 600 is halfway through its strongest single-day gain in nearly two years with a 2.9% advance in Frankfurt, while the region-wide MSCI ex-Japan index in Asia closed out the session with a 0.6% gain.
