Stock Indexes Little Changed Amid War, Inflation, Oil Prices; Yield Inversion Looms: Reuters

Global stocks clenched to their gains for the week on Friday, but rising interest rates, high oil prices, and the Russia-Ukraine kept the rebound at bay as yields sent a warning signal for the economy.

The MSCI world stock index was flat at 695 points, up 5.4% for the week but below its lifetime high of 761.21 from January 4, reports Reuters. In Europe, the STOXX index was little changed at 450 points, 9% below its all-time high from early January.

Oil prices remained above $100 a barrel after slim progress in peace talks between Russia and Ukraine raised the specter of tighter sanctions and prolonged crude supply disruption.

Adding to the mix, U.S. President Joe Biden is expected to deliver a warning that Beijing will pay the price if it supports Russia's war effort when he speaks to China's President Xi Jinping in a call scheduled for 1300 GMT.

In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.15%, and Hong Kong's Hang Seng steadied after a two-day surge. Japan's Nikkei rose 0.6%.

The impact on inflation of ports and supply chains disruptions in China due to a spike in COVID infections risks being massively overlooked by markets, said Michael Hewson, a chief markets analyst at CMC Markets. 

S&P 500 futures eased 0.55%. The gap between two and 10-year U.S. Treasury yields is near its tightest levels since March 2020.

The tighter gap means the yield curve is not far from inverting, an indicator of a likely recession in the following one or two years. The benchmark 10-year Treasury yield was last at 2.1655%.

Photo by Markus Spiske via Unsplash