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“And Lord, we’re especially thankful for nuclear power, the cleanest safest energy source there is. Except for solar, which is just a pipe dream.” – Homer Simpson
It’s just a coincidence that Google searches for the term ‘nuclear war’ are hitting a record high as we’re marking the 11th anniversary of the Fukushima nuclear disaster in Japan, but the term nuclear has been showing up a lot lately. Whether it is Germany’s plan to shut down its nuclear power plants and make it even more reliant on Russian energy, or the Russian invasion of Ukraine that has raised risks of a nuclear accident at the site of the former Chernobyl plant or Ukraine’s other nuclear power plants that are operational, or the risk of nuclear war with Russia if NATO comes in to actively help defend Ukraine, you can’t get away from the subject of nuclear lately.
Thankfully, equity markets look to be putting a lot of these concerns aside temporarily giving investors a reprieve heading into the weekend. S&P 500 futures are currently up over 1%, crude oil is up over 1%, gold is down 1.5%, the 10-year yield is flat right at about 2.0%, and bitcoin is right around $40,000. The positive tone in equities was present for most of the night but just got an added boost shortly before 7 AM on reports that Russian President Putin said there were positive shifts in talks with Ukraine. At this point, the markets will take whatever good news they can get, but keep in mind that Putin is also the one who said Russia wouldn’t invade Ukraine.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, including the latest US and international COVID trends.
It’s been a pretty nasty week for US equities since the close last Thursday. During that span, the S&P 500 is down over 2% while the Nasdaq is down 3%. The worst performing sector during this period has been Consumer Staples (XLP) which is down close to 5%, while Technology (XLK) and Financials (XLF) are both down over 3%. Rounding out the top five of biggest losers, Communication Services (XLC) and Consumer Discretionary (XLY) are both down over 2.5%. Not surprisingly, all five of the aforementioned sectors are also at short-term oversold levels.
While most sectors are lower, three have managed to buck the trend over the last week. Energy (XLE) has been the biggest winner, rising close to 6%, followed by Utilities (XLU) and Real Estate (XLRE). Unfortunately for the broader market, though, these three sectors are also the smallest sectors in terms of their weightings in the overall S&P 500.
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