Tense situation in Eastern Europe prompts investors to move into defensive assets

The Russia-Ukraine conflict has overshadowed concerns about the Federal Reserve’s plans to tighten monetary policy since the Federal Open Market Committee (FOMC) meeting in March. Fed spokesman Bullard said yesterday that he would like to see a 1% (100 basis points) interest rate hike by mid-summer.

Meanwhile, the number of new jobless claims in the US was 248,000, with analysts expecting 218,000. This is the highest number in four weeks. The number of US construction starts in January fell by 4.1% from the previous month’s revised data.

Yesterday, NVIDIA shares fell by 7.5% on the report despite record quarterly earnings, which also came in above the market forecast. Shares of Cisco Systems rose by 2.7% yesterday after the company reported a 17% increase in fiscal Q2 net income and a 6% increase in revenue and raised its adjusted earnings guidance for the current fiscal year. Walmart stock increased by 4% yesterday. The company unexpectedly increased revenue and also raised its dividend. The company Meta (formerly Facebook) has moved beyond the top 10 of the most valuable companies in the world.

Gold and silver prices are skyrocketing higher despite the rise in the dollar index, which tends to correlate inversely with precious metals. On Thursday, Gold hit an eight-month high as investors bought up the yellow metal and other safe-haven assets amid escalating tensions over the Russia-Ukraine conflict.

Yesterday, Oil prices fell on the prospect that Iran could soon renew its nuclear deal with world powers and lift US sanctions, which could return a million new Iranian barrels or more to the global market. On the other hand, supply disruptions due to a geopolitical crisis with a supply shortage in the world market could push oil prices as high as $100 a barrel.

Asian markets are decreasing today. Japan’s Nikkei 225 (JP225) decreased by 0.41%, Hong Kong’s Hang Seng (HK50) lost 1.57%, and Australia’s S&P/ASX 200 (AU200) fell by 1.02%. The Japan nationwide core CPI increased to 0.2% in annual terms, and the consumer inflation rate reached a 0.5% annualized rate. Despite strong economic stimulus, inflation in Japan remains at the lowest level in the world.