S&P500
The US market bottomed out and rebounded sharply to the upside.
On Monday, US stocks scored gains: the Dow added 0.7%, the NASDAQ grew by 1.3%, and the S&P500 increased by 0.6%.
The S&P500 is at 4,296, staying in the 4,260–4,340 range.
After reports of talks between Musk and the Twitter board over the weekend, the share price rose to $51.47 in pre-market trading. At the same time, Trump said he would not return to Twitter, despite the change of business ownership and Musk's plans to reduce Twitter's internal censorship. Musk intends to make Twitter a private company.
Among the possible reasons for the sharp rise in the US market yesterday is the very weak US GDP forecast for Q1. The report will be released on Thursday. GDP growth is forecast to fall sharply from almost +7% in Q4 to just +1 +1.5% growth in Q1. At the same time, the inflation rate (deflator) is expected to be +7%. The overall situation is very worrying. An economy with low GDP growth and high inflation at the same time, so-called stagflation, is a terrifying scenario for modern central banks. However, at the moment the market could get a grip on the possibility of a softening of the Fed's rhetoric, because a sharp rate hike in general could cause GDP to drift into recession.
Oil is holding above $100. Brent is trading at $103 on Tuesday. Gas on the ICE exchange in Europe is not rising strongly, but is holding above $1,000 amid continued high tensions in eastern Europe.
The German government is negotiating the opening of a railway "grain bridge" from Ukraine to German ports and on to Africa and Asia. Millions of tonnes of Ukrainian grain for poor countries are to go over this railway bridge. The Russian navy is now completely blockading Ukraine's main remaining trading ports, Nikolaev and Odessa. This threatens Ukraine's grain exports. Ukraine is one of the main suppliers of grain and other food (sugar, vegetable oil) to poor countries in Asia and Africa. If supplies are disrupted, there could be famine in those countries.
USDX is at 101.70, trading in the 101.40–102.00 range.
As a result of maximum tension in Russia's war against Ukraine, the dollar is being held to its highs.
USDCAD is trading at 1.2710 in the 1.2600–1.2800 range.
The US market has touched bottom. There will now be some range, a pullback and then possible upside. The market is waiting for Q1 GDP report and Fed decisions next week.
Swedish and Finnish media report that the countries plan to apply for NATO membership in May 2022. This is the result of events between Russia and Ukraine that began on February 24 this year.
In Ukraine there is heavy fighting in the east and south-east. Russian troops are trying to advance. There are gains and achievements. Ukraine's defence is quite effective so far. Senior US officials have visited Kiev and firmly promised the best possible support for Ukraine with arms and money. A big meeting of NATO defence ministers and other US allies will be held in Germany today. The main issue is aid to Ukraine. The US has explicitly stated that their goal is not just for Ukraine to survive the battle but for Ukraine to win.
The negotiations between Russia and Ukraine are at an impasse. Neither side is ready to make major concessions in the negotiations. At the same time, the parties' demands are very far from compromise.
