U.S. markets pointing toward positive start to the week

NEW YORK –

U.S. markets rose Monday morning after leaders of the Group of Seven pledged financial and humanitarian support for Ukraine.

Futures for the Dow Jones industrials gained 0.4% while futures for the S&P 500 rose 0.5% after it had its best day in two years Friday.

Group of Seven leaders met via video link with Volodymyr Zelenskyy the Ukrainian President. They were finalizing a deal that would allow for a price cap on Russian crude oil, increase tariffs on Russian goods, and impose additional sanctions. According to a senior U.S. official, details were to be sorted out by finance ministers. This was to allow for preview announcements from summit.

The possibility that Russia might default on its foreign debt was not a concern to the markets. This is despite Russia’s war in Ukraine.

Russia had to meet a Sunday night deadline in order to extend the grace period of 30 days on interest payments due May 27. It could take some time to confirm a default.

At midday in Europe, Germany’s DAX gained 0.8% while the CAC 40 in Paris picked-up 0.1%, and Britain’s FTSE 100 grew 0.7%.

Asian trading saw Hong Kong’s Hang Seng index lead regional gains. It grew 2.4% to 22,229.52, while Tokyo’s Nikkei225 gained 1.4%, to 26,871.27. The Kospi in South Korea climbed 1.5%, to 2,401.92.

Australia’s S&P/ASX 200 added 1.9% to 6,706.00 while the Shanghai Composite index rose 0.9% to 3,379.19.

Stocks in New York rose on Friday due to positive news about inflation. However, the sentiment boost may be temporary as “the downward trend for equity indices still remains intact and there have been previous instances of a single incident pertaining to inflation outlook and central bank policies bringing back market jitters, reversing dip buying sentiments,” Jun Rong Yeap, IG saidComment

The S&P 500 notched a 6.4% gain last week, though it’s still close to 20% below its record set early this year. It gained 3.1% on Friday, while the Dow Jones Industrial Average climbed 2.7%. The tech-heavy Nasdaq ended 3.3% better.

Russell 2000, a smaller company stock index, increased 3.2%.

Central banks are increasing interest rates and taking other measures to reduce the inflation that is so severe. This could cause a recession and hurt investment prices.

Friday’s International Monetary Fun d downgraded its forecast of U.S. growth to 2.9% in 2022, from 5.7% in 2020 when the economy was recovering after the pandemic. It is still a good forecast. saidWith careful policy adjustments, the U.S. could narrowly avoid a recession.

Other trading saw the benchmark U.S. crude oil price rise 41 cents to $108.03/barrel in electronic trading on New York Mercantile Exchange. It increased $3.35 to $107.62 Friday.

Brent crude oil, the international pricing standard, increased 72 cents to $109.82 a barrel.

The dollar rose to 135.31 Japanese dollars from 135.11 yen Friday. The euro rose to $1.0576, from $1.0554.