Here are five things you must know for Friday, March 18:
1. -- Stock Futures Move Lower as Russia-Ukraine War Enters Fourth Week
U.S. stock futures moved lower on Friday, putting the major U.S. indexes on track to snap a three-day winning streak as Russia's war on Ukraine entered its fourth, more intense week, with missiles falling closer to the country's western border with Poland.
A missile strike on the outskirts of Lviv, the western city near the Polish border that has been a haven for people fleeing embattled cities elsewhere in Ukraine, rattled the relative peace there on Friday.
In the Ukraine capital of Kyiv, air raids sounded as city officials reported that a residential area had been shelled. Explosions were also heard in the strategically important southern city of Odessa, nestled on the Black Sea, according to reports.
With the war entering its fourth week, Russia is keeping up its siege campaign, even as American and British intelligence officials say its overall offensive has slowed amid heavy losses, logistical problems and an intense Ukrainian resistance.
Futures contracts linked to the Dow Jones Industrial Average are indicating a 169-point opening bell dip, while those linked to the S&P 500 are priced for a 23.75-point move to the downside.
The tech-focused Nasdaq Composite pointed to an 83-point fall as benchmark as benchmark 10-year Treasury note yields, which spiked to 2.215% in the wake of Wednesday's Federal Reserve rate hike, eased to 2.157% in overnight trading.
Stocks are still on track to end the week higher, however, with the S&P 500 at one- month highs and the Nasdaq at its highest level since March 12.
Still, oil prices resumed their advance, with Brent crude futures gaining 82 cents, or 0.8%, to $107.46 a barrel after surging nearly 9% on Thursday in the largest percentage gain since mid-2020. U.S. West Texas Intermediate (WTI) crude futures climbed $1.14, or 1.1%, to $104.12 a barrel, adding to an 8% jump on Thursday.
Despite the rebound, both benchmark contracts were set to end the week down more than 4%, after having traded in a $16 range. Prices have dropped from 14-year highs hit nearly two weeks ago.
Meantime, President Joe Biden and Chinese leader Xi Jinping plan to confer as the U.S. works to deter China from deeper involvement with Russia during its invasion of Ukraine.
The call, scheduled for Friday, comes as Beijing is trying to present itself as eager to help prevent the Ukraine crisis from worsening further -- without abandoning its alignment with Moscow.
2. -- Nickel Flips Again, Hitting New Trading Limit
The benchmark three-month nickel contract fell 12% on Friday morning to hit a new trading limit, as heavy selling continued on international metal markets amid the ongoing conflict in Ukraine.
The price hit $36,915 a metric ton as it opened for trade, according to Refinitiv data. The 145-year-old exchange, which still has some open outcry trading, has had a wild two weeks with price surges, technical glitches and trading suspensions.
On March 8, nickel prices more than doubled in a matter of hours, climbing above $100,000 a metric ton as one of the world’s top producers, China’s Tsingshan Holding Group bought large amounts to reduce its short bets on the metal. Trading had to be halted as the move exacerbated a price rally at a time when metals were already spiraling upward on Russia’s intensifying conflict in Ukraine.
Then on Wednesday, the LME attempted to resume nickel trading after the rare shut down, though a “systems error” allowed a small number of trades to go through below the newly imposed daily price limit, and the exchange was temporarily halted once again.
The LME installed a trading range of 5% on Wednesday which was widened to 8% for Thursday, and then 12% for Friday.
3. -- BNY Mellon Set to Lose as Much as $200 Million on Russia Pullout
BNY Mellon (BK) may lose as much as $200 million in revenue this year as it stops new business in Russia and complies with a raft of sanctions imposed by Western nations aimed at crippling the nation’s economy.
The New York-based asset manager, which holds and manages $46.7 trillion, has ceased new business in Russia and has “suspended investment management purchases of Russian securities,” a BNY Mellon spokesman said in a statement to The New York Times on Thursday.
“We will continue to work with multinational clients that depend on our custody and record keeping services to manage their exposures,” the Times reported.
The bank expects to lose about $100 million in revenue this quarter as a result. For the rest of the year, revenue could fall by another $80 million to $100 million, it estimated.
BNY Mellon, which is the largest so-called custodian bank, joins other American banking giants including Citigroup (C), Goldman Sachs (GS) and JPMorgan Chase (JPM) -- that have said they will step back from Russia after its invasion of Ukraine prompted swift and severe economic penalties from the U.S. and its allies.
Meantime, the House voted overwhelmingly Thursday to suspend normal trade relations with Russia and Belarus, preparing for President Joe Biden to enact higher tariffs on more products and further weaken the Russian economy in response to its military assault on Ukraine.
The House vote was 424-8. The Senate is expected to take up the measure soon for final passage.
4. -- American Airlines to Resume On-Board Alcohol Sales
American Airlines Group (AAL) will resume selling alcoholic beverages on many domestic flights next month -- a plan it put off last year in an effort to tamp down on unruly passenger behavior.
American said late Thursday it will resume selling beer, wine and spirits on domestic flights over 250 miles on April 18, just as a federal mandate requiring masks on flights and in airports is scheduled to expire.
American was the last major airline to hold off on bringing alcohol back in economy, though it has offered it in premium cabins and beer and wine have been available on long-haul international flights.
Carriers largely suspended food and beverage service in 2020 when travel demand plummeted amid the covid-19 pandemic and airlines moved to minimize contact between customers and crew as much as possible. Those amenities have started to return, but airlines have taken different approaches to alcohol sales in coach sections.
Flight attendants and federal aviation officials say that mask-related disputes and alcohol have both played a role in the rise in onboard incidents since last year. In explaining why it opted not to resume sales last year, American said at the time that alcohol can contribute to “atypical behavior” and exacerbate stressful situations.
5. -- Porsche Confirms All-Electric 911 as It Boosts EV Output
The iconic Porsche 911 sports car will soon be available without an engine.
Porsche on Friday said it expects 80% of its global sales to be all-electric vehicles by 2030, and that it plans to roll out a hybrid version of the 911 following stronger-than-expected sales of the all-electric Taycan.
“The future of Porsche is electric,” Porsche CEO Oliver Blume told media during a roundtable.
The Taycan is Porsche’s first and only all-electric car so far. It represented about 14% of the company’s 301,915 vehicles sold in 2021. Taycan sales were 41,296, topping record sales of the 911 at 38,464 units.
The company’s next two EVs are expected to be the Macan SUV in 2023, followed by the 718 sports car by 2025. Blume also confirmed a hybrid version of its 911 sports car is coming, but he did not disclose a timeframe for its release.
Porsche reports nearly 40% of Porsche vehicles sold in Europe were all-electric or plug-in hybrids vehicles, or PHEVs. Porsche currently offers two PHEVs, which are viewed by many as a short-term, transitional technology before all-electric vehicles.
