NEW YORK (dpa-AFX) – The US stock markets are likely to come under pressure again after the recent recovery. The broker IG appraised the leading index Dow Jones Industrial (Dow Jones 30 Industrial) around three quarters of an hour before the start of trading on Monday, down 1.2 percent at 33,651 points. IG expected the technology-heavy NASDAQ 100 to be around 1.4 percent lower.
At the beginning of the week, investors focused on the war in Ukraine, the tightening of sanctions against Russia and their economic consequences. Russia and Ukraine are now officially talking about an end to hostilities for the first time. Nevertheless, Russian President Vladimir Putin ordered the armed forces to continue the attacks against the neighbor. Ukrainian President Volodymyr Zelenskyy had little hope of an end to the invasion. The nuclear power Russia put its deterrent weapons on increased alert.
According to EU information, around half of the financial reserves of the Russian central bank will be frozen along with other G7 countries. This is to prevent Moscow from using the reserves to support the ruble exchange rate.
The Western allies also decided to exclude some Russian banks from the Swift financial communication system in order to isolate them from international financial flows. In addition, business is no longer allowed to be done with a number of commercial banks, and their assets are frozen.
The exclusion of Russian banks from the Swift payment system is not without economic consequences for the banking sector, explained Thomas Gitzel, chief economist at Liechtenstein-based VP Bank. Their exclusion from international payment transactions means that these financial institutions can no longer settle their liabilities to creditors.
Against this background, bank stocks in Europe have already had to accept considerable losses. In this respect, the papers of US financial institutions could also record losses. JPMorgan (JPMorgan ChaseCo) and Goldman Sachs were each down around 2 percent in pre-market US trading.
Meanwhile, the prospect of multi-billion dollar orders gave European defense company shares wings. In view of the Russian attack on Ukraine, Germany wants to massively upgrade the Bundeswehr. She is to receive 100 billion euros via a special fund.
The announcement by the German chancellor that he would significantly increase spending on armaments represents a significant change in policy, wrote analyst Ross Law of the private bank Berenberg. This turnaround goes far beyond his expectations. Other NATO countries could follow suit in the near future to respond to increased threats.
Among US defense equipment makers, Raytheon (Raytheon Technologies) shares are up four percent premarket. Lockheed Martin shares went up three percent./la/mis