A risk-off day is looming as Ukraine’s battle for survival against a Russian invasion enters its fifth day.
While the world holds out hope for a diplomatic solution, investors are waiting and watching headlines.
Our call of the day, from Miller Tabak + Co.’s chief market strategist Matt Maley, offers fresh levels to watch on the S&P 500
and Nasdaq Composite
The strategist said a late bounce seen last week for those big indexes pushed them back above key support levels, but they remain vulnerable. “Thankfully, the support/resistance levels are still very well drawn,” he told clients in a note late Sunday.
Sharp declines seen earlier last week took those indexes below the “necklines” of their “head and shoulders” technical patterns, a widely followed trend reversal pattern for stock charts. The bounce starting Thursday helped those indexes regain their “lines in the sand” by week’s end.
However, the declines earlier in the week gave both indexes “lower lows” on a closing and intraday basis.
“Therefore, unless the bounces that began last week can see a lot more upside follow-through, last week’s action was still something to be very concerned about,” said Maley, who advises watching last week’s closing S&P 500 low of 4,225.
“Any meaningful break below that line will take it well below the ‘neckline’ of its ‘H&S’ pattern…and that would be a very negative development,” said Maley. But if the index can rally back and take out February highs of 4,590 “in any material way,” that will usher in a solid “higher-high” and much needed relief,” he said.
As for the Nasdaq, Maley said the technical setup is similar. Any “significant break” below last week’s closing lows around 13,500 will give it a “lower-low” and take it below that neckline — a bearish development. On the flip side, a break above February’s high of 15,140 would offer up a “higher-high” easing a lot of market tension.
Maley also commented on the fact that a big washout decline for stocks, that can usher in an important bottom, hasn’t happened. “We haven’t seen a few days when the volume has been huge…and the breadth absolutely horrible,” he said.
He isn’t as worried because he said those washout moves, while compelling, can also cause investors to “miss the boat” by waiting for them to buy stocks. Maley said he would reassess the team’s near-term stance if big indexes break above key resistance,
Ukranian and Russian delegates are currently on the Belarusian border while fighting continues in Ukraine, following a tense weekend that saw Russian President Vladimir Putin up tensions by moving the country’s nuclear forces to high alert. Belarus troops reportedly may be ready to fight alongside Russia.
The Treasury has barred any U.S. citizen from transactions with Russia’s central bank, finance ministry or the national wealth fund. The Central Bank of Russia doubled interest rates and shut stock markets on Monday, after Western allies agreed to cut off some Russian banks from the SWIFT global payments system. The ruble
has been in free fall and listed stocks in London slumped.
European and U.S. defense contractors — Raytheon
and General Dynamics
— are surging on Germany’s surprise move to raise military spending, and send weapons to Ukraine.
CEO Warren Buffett said there is “little that excites us” in the U.S. stock market, in his annual shareholder letter released on Saturday morning. Its energy unit pledged to keep reducing carbon emissions.
stock is poised for a 15-year high following a $13.4 billion buyout deal with TD Bank
A United Nations report shows climate change is racing ahead of the world’s efforts to adapt.
Earnings from Avis Budget
and Advance Auto Parts
Data showed the U.S. trade deficit jumped 7.1% in January to $107.6 billion, a new all-time high for the second straight month. This week’s highlights include the Institute for Supply Management’s latest manufacturing report and payrolls data for February.
are deep in the red, as investors flocked to bonds
the U.S. dollar
are also under pressure, with financial stocks sinking. Crude
reversed earlier gains to drop 1% on talk that the U.S. and other nations could release 70 million barrels of oil from global stockpiles. Goldman Sachs lifted its Brent
target to $115, from a current $98 a barrel.
These were the top traded tickers on MarketWatch as of 6 a.m. Eastern Time:
Here’s a refresher chart from Goldman on the commodities that Russia produces:
Airbnb will offer free, short-term housing for 100,000 Ukrainian refugees.
Here’s how some are helping Ukraine’s animals.
Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.
Want more for the day ahead? Sign up for The Barron’s Daily, a morning briefing for investors, including exclusive commentary from Barron’s and MarketWatch writers.
Leave a Reply