Moscow launched a full invasion of Ukraine early Thursday after failed attempts by the west to deter Putin from conducting the assault. Sirens and explosions were heard in several cities including Kyiv’s Maiden Square. In a surprise media announcement, Putin said that he had made up his mind to conduct a ‘special military operation’ as a means to ‘demilitarize’ and ‘denazify’ the Ukrainian military and protect the inhabitants of Donetsk and Luhansk from a Ukrainian instigated ‘genocide’. “Don’t follow its criminal orders… I urge you to lay down your weapons and go home,” he said addressing the Ukrainian military.
Further dips marked the stock trades on Wednesday as grueling tension continued rallied on the intensified market volatility. NASDAQ fell 2.57% to 13,037.49, accumulating its yearly loss to date at 17.66%. The DJIA toppled 464.85 points while the S&P 500 dropped 79.26 points marking a 9.44% and 11.91% loss from the beginning of the year respectively. Only 2 stocks gained on the DJIA with NASDAQ joining in the loss relay with only 8 stocks gaining.
More uncertainty marred the stock market as stock index futures plummeted lower on Thursday following Moscow’s determined attack to Ukraine. Dow futures dipped over 600 pts while the NASDAQ futures declined by 2.5%. Except for the energy sector that increased by 1.01%, all sectors declined the consumer’s discretion and technology sectors leading with drops of 3.42% and 2.56% respectively.
The Ukraine-Russia geopolitical tension spurred the gains in the energy sector in the past few months, as Russia controls about 10% of the global oil supply. The Brent crude oil index shot to $102.84 on Thursday, a first time to go over $100 since 2014. The rising oil prices add another worry to traders that are already struggling to balance with the economic and political pressures exerted in the market.
Owing to the takeoff of the Ukrainian invasion on Thursday morning coupled with the salvo of sanctions pushed against Russia, there is a higher likelihood that the energy sector will be further disrupted and price shocks passed across the globe. This will add to the rising inflation rate that still continues to weigh down the consumers purchasing power in addition to adding more stress to the already struggling global supply chain.
David Petrosinelli, a senior trader at InspereX, asserted the looming distress. Speaking to Forbes last week, he said, “Nothing tells me that the supply and demand imbalance and geopolitical risks are going away near term.” According to Russell Hardy, Vitol’s CEO, the oil demand is expected to surge towards the second half of the year, which ought to be disturbing given that there is no corresponding increase in supply. “Oil prices have higher to go, and they will stay there for an extended period of time… Eventually we’re going to run out of spare capacity,” he said on Monday.
Wednesday Highlights
