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By Nicholas
Jasinski | Thursday, February 17 Flight
to Safety. Investors
in aggregate took down their risk exposure today. Stocks fell, bonds rose,
commodity prices declined, and gold prices hit their highest levels in more
than eight months. Continued signs of escalation in the
Ukraine-Russia conflict and some less-than-stellar economic data were behind
the risk-off sentiment. White House officials said today that a Russian
invasion of Ukraine could be "imminent," even as diplomatic efforts
to deescalate the situation continue. This morning, the latest weekly initial
jobless claims data came in worse than expected, at 248,000—versus the prior
week's 225,000 and forecasts for 220,000. January housing starts
likewise missed expectations and declined from December, as did
the Philadelphia Fed manufacturing index for last month. The scary geopolitical headlines and
deteriorating economic data are just more curveballs for investors to deal
with in an already uncertain and volatile period for the market. Federal
Reserve policy is about to change, and that's enough to have
everyone on edge. "Investors, wary of any bad news, have
been unable to maintain positive momentum in equity markets across the globe
as geopolitical risks dominate headlines," said Peter
Essele, head of portfolio management for Commonwealth
Financial Network. "A further escalation of tensions in
the near term could roil markets due to the potential impact on a tenuous
global supply chain, particularly as the Fed prepares for its first-rate hike
in years. A perfect storm may be on the horizon if calmer heads don’t
prevail." Today's stock-market selloff was broad: nine
of the S&P 500's 11 sectors closed
in the red, as the index dropped 2.1%. The Dow Jones
Industrial Average fell 1.8% for its worst day since
November, while the Nasdaq Composite
lost 2.9%. In the U.S. Treasury market prices rose as
yields fell. The yield on the 10-year note declined 0.07 percentage point, to
1.97%. The yield was above 2% as recently as Tuesday. The two-year and
30-year yields both slipped about 0.05 percentage point today, to 1.48% and
2.31%, respectively. Finally, the price of an ounce of gold added
1.6% today, to more than $1,900. It's up 12 of the past 14 sessions and the
highest value since early June 2021. "A month ago, no one wanted to touch
gold," wrote Edward Moya, senior market
analyst, the Americas, at currency brokerage Oanda. "Now
gold has suddenly become the flavor of the month... Investors are scrambling
for safe havens as geopolitical risks intensify and fears grow that the
central banks might go overboard with tightening monetary policy." |
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DJIA: -1.78% to 34,312.03 The Hot Stock: Newmont
Group +5.4% Best Sector: Consumer
Staples +0.8%
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