Finance

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., February 15, 2022.
Brendan McDermid | Reuters

Stock futures fell sharply on Monday night, as traders continue to monitor brewing tensions between Russia and Ukraine.
Futures tied to the Dow Jones Industrial Average were down by 476 43 points, or 1.4%. S&P 500 futures slid 1.7%, and Nasdaq 100 futures were off by 2.2%. The U.S. stock market was closed Monday due to the President’s Day holiday.

Oil prices rose, with West Texas Intermediate futures jumping 3.6% to $94.30 per barrel.
Russian President Vladimir Putin said Monday that he would recognize the independence of two breakaway regions in Ukraine, potentially undercutting peace talks with President Joe Biden. That announcement was followed by news that Biden was set to order sanctions on separatist regions of Ukraine, with the European Union vowing to take additional measures.
Putin later ordered forces into the two breakaway regions.
The news came after the White House said Sunday that Biden has accepted “in principle” to meet with Putin in yet another effort to deescalate the Russia-Ukraine situation via diplomacy. White House press secretary Jen Psaki said the summit between the two leaders would occur after a meeting between Secretary of State Antony Blinken and his Russian counterpart Sergey Lavrov.

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The Russia-Ukraine conflict has put pressure on market sentiment recently, with the major averages posting back-to-back weekly losses. The Dow fell 1.9% last week, and the S&P 500 and Nasdaq Composite slid 1.6% and 1.8%, respectively.

Traders are also keeping an eye on the Federal Reserve, as the U.S. central bank is expected to raise rates multiple times starting next month. According to the CME Group’s FedWatch tool, traders are betting that there is a 100% chance of a Fed rate hike after the March 15-16 meeting.
Expectations of tighter monetary policy have put pressure on stocks, particularly those in rate-sensitive sectors like tech, and have sent Treasury yield sharply higher to start 2022. The benchmark 10-year Treasury yield ended last week around 1.93% after briefly breaking above 2%. The 10-year began 2022 trading at around 1.51%.
“All eyes are on the Fed,” Strategas investment strategist Ryan Grabinski wrote in a note released Friday evening. “As of today, the market is expecting the Fed to raise interest rates at nearly every meeting this year. Despite that, we left Monetary Policy as Favorable for now because the Fed is continuing to purchase Treasuries (an accommodative policy action).”
Meanwhile, Wall Street is preparing for the tail-end of the corporate earnings season, with Home Depot and eBay among the companies set to report this week. It has been a solid earnings season thus far: Of the more than 400 S&P 500 companies that have posted fourth-quarter earnings, 77.7% have beaten analyst expectations, according to FactSet.
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Credit Suisse was scrambling Sunday to contain the fallout from its latest scandal after several newspapers reported that more than 18,000 leaked accounts showed that criminals, alleged human rights abusers and sanctioned individuals had been clients of the Swiss bank.
The leaked information, which covered accounts holding more than $100 billion, came from a whistle-blower who shared his findings with German newspaper Süddeutsche Zeitung, according to a press release.
The accounts had been opened from the 1940s into the 2010s, according to the Sunday release from the Organized Crime and Corruption Reporting Project.

A Credit Suisse logo in the window of a Credit Suisse Group AG bank branch in Zurich, Switzerland, on Thursday, April 8, 2021.
Stefan Wermuth | Bloomberg | Getty Images

Credit Suisse was scrambling Sunday to contain the fallout from its latest scandal after several newspapers reported that more than 18,000 leaked accounts showed that criminals, alleged human rights abusers and sanctioned individuals including dictators had been clients of the Swiss bank.
The leaked information, which covered accounts holding more than $100 billion, came from a whistle-blower who shared his findings with German newspaper Süddeutsche Zeitung, according to a press release. The newspaper then involved an anti-corruption group and 46 other media outlets around the world, including The New York Times, Guardian, Le Monde and others.

Clients of the second-biggest Swiss bank included an international cast of unsavory characters, according to the media reports. Account holders included a Yemeni spy chief implicated in torture, Venezuelan officials involved in a corruption scandal, and the sons of former Egyptian dictator Hosni Mubarak.
The accounts had been opened from the 1940s into the 2010s, according to the Sunday release from the Organized Crime and Corruption Reporting Project.
“I’ve too often seen criminals and corrupt politicians who can afford to keep on doing business as usual, no matter what the circumstances, because they have the certainty that their ill-gotten gains will be kept safe,” Paul Radu, co-founder of the OCCRP, said in the statement. “Our investigation exposes how these people can bypass regulation despite their crimes, to the detriment of democracies and people all over the world.”
While Swiss banks, world-renowned for the country’s strict secrecy laws protecting clients, aren’t supposed to accept money linked to criminal activity, the law is mostly unenforced, according to The New York Times, which cited a former head of Switzerland’s anti-money laundering agency.
Credit Suisse said in a nearly 400-word statement on Sunday that it “strongly rejects” the accusations made about its business practices.

“The matters presented are predominantly historical, in some cases dating back as far as the 1940s, and the accounts of these matters are based on partial, inaccurate, or selective information taken out of context, resulting in tendentious interpretations of the bank’s business conduct,” the bank said.
About 90% of the accounts in the leak had been closed or were in the process of being closed before media inquiries began, the bank said. It is “comfortable” that the remaining accounts were vetted properly. Credit Suisse added that it couldn’t comment on individual clients and that it’s already taken action “at the relevant times” to address improper clients.
For much of the past decade, the Zurich-based financial giant has moved from one crisis to another as it came to terms with its role in helping clients launder ill-gotten funds, shelter assets from taxation and aid in corruption.
In 2014, the bank plead guilty to helping Americans file false tax returns and agreed to pay $2.6 billion in fines and restitution. Last year, it agreed to pay $475 million for its role in a bribery scheme in Mozambique.
The firm had to replace both its CEO and chairman within the past two years and was ensnared in the collapse of the supply chain finance firm Greensill as well as the U.S. hedge fund Archegos.
“The pretext of protecting financial privacy is merely a fig leaf covering the shameful role of Swiss banks as collaborators of tax evaders,” said the Credit Suisse whistleblower, according to the OCCRP statement. “This situation enables corruption and starves developing countries of much-needed tax revenue.”
This story is developing. Please check back for updates.

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“AN EASY way to avoid Tariffs? Make or produce your goods and products in the good old USA. It’s very simple!” In the days when Twitter was the main medium for presidential proclamations, that was what Donald Trump recommended to companies using China as a manufacturing base. He was half right: avoiding tariffs has proved to be quite simple. What he failed to see, though, was that avoidance is an eminently viable strategy for companies staying put in China.The scale of avoidance is, to use a non-technical term, huge. A giant discrepancy that has opened up between Chinese and American trade data provides a window onto the tariff dodging that has occurred over the past three years since America slapped duties on Chinese products. Much of it involves importers taking advantage of legal loopholes; some of it appears to be outright evasion, with companies lying to customs inspectors.The numbers add up quickly: the total value of made-in-China goods entering America and dodging tariffs may have surpassed $100bn in 2021, according to calculations by The Economist. Taken alone, these goods would be equivalent to America’s fourth largest source of imports, even outstripping its purchases from Japan and Germany. Moreover, if all these goods were counted properly, America’s bilateral goods trade deficit with China would have smashed its annual record in 2021—a damning indictment of the use of tariffs as a way to narrow the trade gap with China.To understand the discrepancy, start with the official American trade data. According to figures released on February 8th, America bought $506bn of goods from China last year. That was up 16% from 2020 (a reflection of America’s booming consumption) but still below its import peak reached in 2018. The Chinese trade data are starkly different. They show that America bought $576bn of goods from China last year, up nearly 30% from 2020, far and away the most on record.This gap is particularly striking because the historical pattern is for China to systematically underestimate its exports to America by roughly 18%. (One reason for the historical underestimate is that China classifies many products shipped via Hong Kong as exports to Hong Kong, whereas America counts them as imports from China.) If the 18% underestimate rule of thumb still applies, China’s exports to America may have reached as much as $680bn last year, $174bn more than reported by America.The obvious question to ask is why anyone should privilege China’s data, with its reputation for manipulation, over American data. In other words, perhaps America has counted its purchases from China correctly, while China has over-stated its sales to America. Last year two economists then with the Federal Reserve, Hunter Clark and Anna Wong, explored this exact possibility, trying to account for the data discrepancy.Part of the problem, they found, did indeed stem from the Chinese side. To blunt the impact of the trade war with America, China dramatically increased tax rebates for its exports, which in turn encouraged exporters to declare more overseas shipments. But in working through the 2020 trade data, their conclusion was that the tax changes explained just about 14% of the discrepancy, while tariff avoidance explained 62% (it was hard to pin down a specific reason for the remainder, which they referred to as “other”). If the same proportions applied to the 2021 trade data, tariff avoidance would have reached $108bn, nearly double the amount in 2020. And there is reason to think it may be even higher: in 2021 China actually decreased some of its tax rebates for exporters, whereas those trying to get around America’s tariffs will only have become more adept at doing so.What are the tricks of the trade? One approach is to exploit what is known as the “de minimis” rule. According to this, countries neither charge duties on nor collect full data on imports below a certain value. Most developed countries set the threshold at around $200. In 2016, eager to focus scarce customs resources on high-value shipments, America lifted its bar to $800, providing importers with ample scope to avoid tariffs. Over the 12 months to September 2021, American customs officials counted that 771.5m de minimis packages entered the country—a fifth more than during the previous period—with no estimate of their actual value. Some logistics companies, typically based in the country, now offer services to American importers, letting them make bulk shipments to Mexico or Canada and then break them into smaller packages for tariff-free entry into America.Some companies may also be evading tariffs by presenting false information to customs inspectors. In their paper, Mr Clark and Ms Wong noted that American importers could use “low-ball invoices supplied by their Chinese suppliers”. There also appears to have been an increase in goods produced in China but falsely labelled as originating from other countries. Since 2016 the Customs and Border Protection has published a record of its investigations into potential evasions of anti-dumping duties. Over the past two years it has launched 37 such investigations, up from 24 over the previous three years. Virtually all have targeted products from China. In January, for example, customs investigators determined that Simpli Home, a furniture company, had imported quartz products from China but incorrectly claimed they were from Vietnam. In December they found that A&A Pharmachem, a supplier of drug ingredients, had transshipped China-produced xanthan gum through India to avoid tariffs.With tighter rules and closer checks at the border, America could stop some of this tariff avoidance. Earl Blumenauer, a Democratic congressman from Oregon, introduced a bill last month—aimed squarely at China—that would prevent companies from non-market economies from using the de minimis loophole. If customs agents were to open more shipping containers and sift through them carefully, they might identify more understated invoices and more mislabeled countries of origin. But doing so would require expertise and time—all the more difficult when American ports are suffering from backlogs. Officials want to speed shipments up, not slow them down with yet more inspections.Indeed, America has reason to be at least somewhat grateful for all of the tariff avoidance. Duties at the border ultimately act as a tax on American consumers, pushing up prices for imported products. At a time when inflation is running high, tariff dodging helps to keep costs down. For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More

New rules from the Cyberspace Administration of China took effect Tuesday and require Chinese internet platform companies with personal data of more than 1 million users to get approval before listing overseas.
That includes the secondary and dual listings, the regulator said Thursday.
U.S.-listed Chinese companies have pursued such listings as tougher U.S. audit requirements will likely force many to delist in coming years.
The new rules mean not all of them will find it easy to list on another market.

An investor sits in front of a board showing stock information at a brokerage office in Beijing, China.
Thomas Peter | Reuters

BEIJING — If U.S. regulation forces Chinese companies to delist from New York, new rules from Beijing further complicates their path to raising money in public markets abroad.
Since Tuesday, new rules from the Cyberspace Administration of China require Chinese internet platform companies with personal data of more than 1 million users to get approval before listing overseas.

While the rules do not apply to companies that have already gone public, those pursuing dual or secondary listings overseas must follow the CAC’s new approval process, according to a CNBC translation of a Chinese article published Thursday on the regulator’s website.
It’s yet another consideration for international investors looking at Chinese companies.
“The timetable for companies’ overseas listings has become longer, and uncertainty has increased for listing,” said Ming Liao, founding partner of Beijing-based Prospect Avenue Capital, according to a CNBC translation of the Chinese remarks.
As regulators and businesses figure out how the new measures will be implemented, institutional investors hope to better understand the government’s thinking by seeing some approvals for overseas listings, he said.
Fallout from Chinese ride-hailing app Didi’s U.S. IPO in late June prompted Beijing to increase regulatory scrutiny on what was a rush of Chinese companies looking to raise money in New York.

Chinese IPOs in the U.S. have essentially dried up in the months since, while existing U.S.-listed Chinese stocks face the threat of delisting in coming years from Washington’s more stringent audit requirements.
Several of these Chinese companies, including Alibaba, have turned to Hong Kong for dual or secondary listings in the last few years. That way investors could swap their U.S. shares for ones in Hong Kong in the event of a delisting.

The Hong Kong option

Only about 80 of 250 U.S.-listed Chinese companies would be eligible for a secondary or dual primary listing in Hong Kong, according to China Renaissance analysis from Bruce Pang and his team in January. That’s due to stringent requirements in Hong Kong for minimum market capitalization and other factors.
The remaining U.S.-listed Chinese companies would likely only have the choice of privatizing, and then attempting a listing in the mainland A share market, the report said. “In practice,” the analysts said, “we think Hong Kong will not be exempted from the cybersecurity process – the door is still open, in our opinion, for Beijing to impose a cybersecurity review on proposed listings in Hong Kong.”
The mainland market is less accessible to foreign investors and is dominated by more sentiment-driven retail investors.
Analysts also point out the Hong Kong stock market doesn’t compare with New York when it comes to trading volume and the price tech companies can get for their shares.
It remains to be seen to what extent cybersecurity scrutiny will apply to future Chinese stock offerings in Hong Kong.

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U.S.-listed, China-based companies that pursue secondary or dual listings in Hong Kong only need the CAC’s review if the regulator identifies a national security risk related to the companies’ products or data processing, said Marcia Ellis, global chair of the private equity group at Morrison & Forrester, Hong Kong.
That’s “a different threshold” from the CAC review required for listings outside of China in markets such as London or Singapore, Ellis said. In these cases, companies with personal data on more than 1
million users would need CAC approval before going public.
“Effectively CAC’s latest statements just clarified a couple of matters and plugged up some potential loopholes,” she said.
The latest CAC regulation does not mention Hong Kong.
However, in Thursday’s article, the regulator said its new overseas listings regulation “does not mean operators in the process of listing in Hong Kong can ignore the relevant network security, data security and national security risks.”
Days after Didi’s listing, the CAC ordered the company to suspend new user registrations and remove its app from app stores, while the regulator began a cybersecurity review over data privacy concerns.
In December, Didi announced it planned to delist from New York and relist in Hong Kong. The company has yet to confirm when that transition would occur, and it’s unclear whether the cybersecurity review has ended.
Shares are down more than 14% so far this year, after a drop of 64% in the roughly six months of 2021 trading.

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Scott Olson

Check out the companies making headlines in midday trading.
Roku — Roku shares were down 22.2% after the company reported revenue for the most recent quarter that fell short of analysts’ forecasts. Roku also issued a weaker-than-expected outlook due to higher component prices and supply chain disruptions.

DraftKings — Sports betting company DraftKings saw shares tumble 21.6% after it reported a narrower-than-expected quarterly loss and issued guidance projecting a wider-than-expected adjusted loss for the full year.
Bloomin’ Brands — Shares of the Outback Steakhouse parent jumped 7.5% after the company reported a quarterly earnings beat and a modest revenue beat. Bloomin’ also reinstated its quarterly dividend and announced a new $125 million share buyback program.
Virgin Galactic – Shares of Virgin Galactic fell 6.7% following the announcement that Chairman Chamath Palihapitiya will be stepping down from the board of directors, effective immediately. His special purpose acquisition company took Virgin Galactic public in 2019. Palihapitiya said he’s leaving “to focus on other existing and upcoming public board responsibilities.”
Dollar Tree — Shares of the discount retailer jumped 5.2% and was one of the top gainers in the S&P 500, after the company announced executive chairman Bob Sasser will retire and be given the title of Chairman Emeritus.
Redfin — The real estate brokerage’s shares tumbled by 20.1% after RBC Capital Markets downgraded the stock to sector perform from outperform, calling the bull case for the stock “broken.” Redfin on Thursday reported a smaller-than-expected loss for the fourth quarter and beat on revenue. Real estate services unit and gross margins missed expectations.

Shake Shack — The restaurant chain’s shares fell 4.1% after the company issued quarterly revenue guidance below estimates, noting that labor shortage challenges stemming from the omicron variant led the company to close restaurants. Shake Shack said it expects $196 million to $201.4 million in revenue for the first quarter, compared with estimates of $210.9 million.
Pilgrim’s Pride — Shares of the poultry producer sank 13.6% after the Brazilian meatpacker JBS withdrew from plans to buy the remaining 20% of the company it doesn’t already own, saying the two sides couldn’t agree on terms of a deal.
Intel — Shares of Intel were down 5.3%, leading laggards on the Dow Jones Industrial Average. Bank of America reiterated an underperform rating on the stock.
Ford — The automaker’s shares rose 2.8% following a report that CEO Jim Farley is evaluating options to separate the company’s electric vehicle unit from its legacy internal combustion engine business, and could even be weighing a spinoff of one of them.
General Electric — The electric company saw its shares slide 5.8% after it provided a profit outlook for 2022 saying supply chain challenges continue to pressure its health care, renewable energy and aviation businesses and could remain through the first half of 2022. “As a result, supply chain headwinds may continue to partially mask the significant progress we are making across our businesses,” the company said in an 8-K filing. 
 — CNBC’s Hannah Miao contributed reporting

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Check out the companies making headlines before the bell:
DraftKings (DKNG) – The sports betting company’s stock tumbled 13.2% in the premarket, despite a narrower-than-expected quarterly loss and revenue that beat estimates. DraftKings projects a wider-than-expected adjusted loss for the full year as costs continue to rise.

Roku (ROKU) – Roku shares were down 26% in the premarket, despite better-than-expected earnings for its latest quarter. The maker of video streaming devices’ revenue fell short of analyst forecasts, and it issued a weaker-than-expected outlook due to higher component prices and supply chain disruptions.
Bloomin’ Brands (BLMN) – The restaurant operator beat estimates by 8 cents with an adjusted quarterly profit of 60 cents per share, with revenue slightly above consensus. The parent of Outback Steakhouse and other chains also reinstated its quarterly dividend and announced a new $125 million share buyback program. The stock surged 6.6% in premarket action.
Deere (DE) – The heavy equipment maker reported quarterly earnings of $2.92 per share, well above the $2.26 consensus estimate, with revenue also topping analyst forecasts. The company also raised its annual profit forecast amid solid demand and higher prices.
Shake Shack (SHAK) – Shake Shack reported an adjusted quarterly loss of 11 cents per share, narrower than the 11-cent loss analysts were anticipating, while the restaurant chain’s revenue matched Wall Street forecasts. Shake Shack said the omicron variant kept customers away and led to some temporary restaurant closures. It also issued a downbeat current-quarter forecast amid increasing costs. Shake Shack plunged 15.5% in premarket trading.
Dropbox (DBX) – Dropbox beat estimates by 4 cents with adjusted quarterly earnings of 41 cents per share, and the software company’s revenue also topped Street projections. Paid user numbers and average revenue per user also came in above consensus, but the stock slid 6.3% in premarket action as its guidance for current-quarter profit margin was slightly lower than expected.

DuPont (DD) – DuPont finalized a deal to sell the majority of its materials unit to specialty materials maker Celanese (CE) in an $11 billion deal. DuPont jumped 4.1% in the premarket while Celanese gained 3.8%.
Pilgrim’s Pride (PPC) – Pilgrim’s Pride slumped 14.8% in premarket trading after Brazilian meatpacker JBS dropped plans to buy the portion of the poultry producer that it doesn’t already own. JBS holds an 80% stake in Pilgrim’s Pride, but the two sides could not agree on terms of a deal for the remaining 20%.
Intel (INTC) – Intel Chief Executive Officer Pat Gelsinger told an investor gathering that the chipmaker is aiming to achieve double-digit annual revenue growth in three to four years. Gelsinger also said Intel may be interested in participating in a potential consortium if one is formed to buy British semiconductor company Arm Ltd. Intel fell 1% in premarket trading.
NortonLifeLock (NLOK) – NortonLifeLock pushed back the expected completion date of its deal to buy rival cybersecurity company Avast to April 4 from Feb. 24, saying it was still waiting for regulatory approvals in the U.K. and Spain. NortonLifeLock fell 1% in the premarket.

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Chinese President Xi Jinping told top leaders in early December to speed up work on new laws for the tech sector, according to a speech published Wednesday by the Chinese Communist Party’s bimonthly journal.
It’s a sign that regulation is not going away, even as the speech covers little new ground and economists expect the worst of Beijing’s crackdown is over.
Chen Long, partner at Beijing-based consulting firm Plenum, emphasized it’s important not to read too much into Xi’s speech. “This speech is not something new but a summary of what they have done,” he said.

The Great Hall of the People is seen after the closing meeting of the fourth session of the 13th National People’s Congress (NPC) on March 11, 2021 in Beijing, China.
VCG | Visual China Group | Getty Images

BEIJING — Chinese President Xi Jinping told top leaders to speed up work on new laws for the technology sector during a speech in early December, according to the Chinese Communist Party’s bimonthly journal published Wednesday.
It’s a sign that regulation is not going away yet, even though the speech covers little new ground and economists expect the worst of Beijing’s crackdown is over.

China must “accelerate the pace of legislation in the fields of digital economy, internet finance, artificial intelligence, big data, cloud computing, etc.,” Xi said, according to a CNBC translation of the Chinese text.
He also called for more laws to ensure national security, and urged increased use of law for “international struggles” — including countering foreign sanctions.
But most of Xi’s speech, delivered on Dec. 6 to China’s Central Politburo of top leaders, focused on broad theoretical points such as not blindly following Western systems.

I do think the use of regulation as a tool to shape the economy and society that China wants is not over.

Mattie Bekink
China director, Economist Corporate Network

In the last year, a succession of new rules aimed at tackling alleged monopolistic practices by tech companies, data security and other issues have shocked global investors. The regulations address long-standing problems, but their abruptness has disrupted businesses and prompted mass layoffs.
“We anticipate there will be continuing developments in regulations particularly as related to tech,” said Mattie Bekink, China director at the Economist Corporate Network. She pointed out that Beijing has released plans for building a “Chinese socialist rule of law” by 2035.

“I do think the use of regulation as a tool to shape the economy and society that China wants is not over,” Bekink said.
She noted how law in the West tends to focus on the relationship between individuals and the state, while in China, the focus has been on commercial law — relationships between private sectors and the state.

A public summary of what’s been done

Xi’s speech — given over two months ago but released publicly this week — is just one of the many official statements offered to the public in a country where information is tightly controlled.
Reading between the lines of similar official commentary, economists concluded last week that the worst of China’s regulatory crackdown is over as Beijing focuses more on growth. But they said that doesn’t mean a reversal or an end to new rules.
“Xi puts a lot of emphasis on the use of law,” said Chen Long, partner at Beijing-based consulting firm Plenum. “The Chinese government uses a lot of regulations to govern. It’s been his idea since 10 years ago that he wants to make a lot of regulations into law, so you have a legal basis for these policies.”

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Chen expects fewer surprises on tech regulation this year compared to last year.
But he emphasized it’s important not to read too much into Xi’s speech. “This speech is not something new,” he said, “but a summary of what they have done.”
Even on the point of China’s use of law to counter foreign sanctions, Beijing had passed such legislation in June. If the Chinese government deems individuals or entities as involved in taking discriminatory action against Chinese citizens or entities, the law allows Beijing to freeze assets or deny entry, among other measures.

“China wants to use law to protect its interests in relation to other nations, including both adding domestic authority and having a voice in shaping international law norms to better serve its interests — which I don’t think is unusual for a nation to do,” said Jeremy Daum, senior fellow at Yale Law School’s Paul Tsai China Center.

Tech regulation has global implications

China’s crackdown on tech comes as the industry has grown rapidly beyond the scope of existing regulations. It’s a balance governments worldwide are trying to strike as they consider how to regulate cryptocurrencies, data and other new technologies.
In some areas such as algorithms, Beijing is acting more quickly than other governments and could even set a global precedent, analysts have said.

Meanwhile on the political front, Chinese authorities have promoted their efforts to eliminate poverty and grow the middle class — a move away from prioritizing economic growth at all costs.
Much of the shift came just after the ruling Chinese Communist Party celebrated its 100th anniversary on July 1. This coming fall, the party is expected to give Xi an unprecedented third term as president.

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Traders on the floor of the NYSE, Feb. 17, 2022.
Source: NYSE

Stock futures were flat in overnight trading Thursday following the Dow Jones Industrial Average’s worst day of 2022 as investors dumped risk assets amid geopolitical concerns.
Futures on the blue-chip Dow were up by 30 points. S&P 500 futures and Nasdaq 100 futures both edged 0.1% higher.

Wall Street suffered a steep sell-off on Wednesday, with the Dow falling more than 600 points for its biggest daily drop since end of November. The S&P 500 dropped more than 2% to break a two-day winning streak, while the Nasdaq Composite declined 2.9%.
Investors continued to be on edge about the ongoing tensions between Russia and Ukraine. Ukraine accused pro-Russian separatists of attacking a village near the border. In the U.S., meanwhile, Secretary of State Antony Blinken was headed to the United Nations to make an urgent appeal against an invasion.
“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,” said Peter Essele, head of portfolio management at Commonwealth Financial Network. “A perfect storm may be on the horizon if calmer heads don’t prevail.”
Investors have been grappling with the outlook for Federal Reserve policy. St. Louis Fe President James Bullard, who had just called for aggressive action, warned that inflation could get out of control without rate hikes.
Major averages are on pace for their second negative week in a row. The Dow is down 1.2% week to date, while the S&P 500 and the Nasdaq have fallen 0.9% and 0.5% this week, respectively.

“Wall Street is feeling very jittery as it looks to the left and sees intensifying geopolitical risks with the Ukraine situation and then it looks to the right and sees the potential for aggressive Fed tightening,” Edward Moya, senior market analyst at Oanda, said in a note.
Roku shares dropped as much as 12% in extended trading after the video-streaming company reported a revenue miss and issued a weaker-than-expected guidance.

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