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Biden does not intend to talk to Putin until conditions are in place for talks via Reuters

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© Reuters. Ukrainian soldiers prepare to fire with the Bureviy multiple launch rocket system at a position in the Donetsk region, as Russia’s offensive into Ukraine continues, Ukraine November 29, 2022. Radio Free Europe/Radio Liberty/Serhiy Nozhenko via REUTERS

Written by Pavel Politiuk

Kyiv (Reuters) – The White House said on Friday that US President Joe Biden does not intend to speak with Russian President Vladimir Putin at this time, a day after Biden said he was willing to talk about whether Putin was looking for a way to end the war. .

Speaking after meeting Thursday at the White House with French President Emmanuel Macron, Biden said he was willing to talk to Putin “if there is in fact an interest in him deciding he’s looking for a way to end the war,” adding that the leader “has not done that yet.”

When asked about Biden’s remarks, White House national security spokesman John Kirby (NYSE) told reporters that the terms for such discussions did not exist.

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“We are not now at a point where talks seem like a productive way to deal with it now,” he said.

Earlier, the Kremlin responded to Biden’s apparent offer, saying the West should recognize what Moscow calls Russia’s “new territories” before any talks with Putin.

“The president of the Russian Federation has always been and remains open to negotiations in order to secure our interests,” Kremlin spokesman Dmitry Peskov told reporters.

Kirby said only Ukraine could determine if and when a negotiated settlement could be reached. Kyiv says peace talks will only be possible if Russia stops attacking and withdraws.

Russia has previously said it is open to peace talks. Ukraine and its allies fear that any cease-fire without a full withdrawal will allow Russian forces to regroup in preparation for further attacks.

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Peskov said Russia would not withdraw from Ukraine.

He added that the search for ways to end the war had been hampered by the United States’ refusal to recognize lands in Ukraine annexed by Russia. Putin declared Ukraine’s southern Kherson region and three other partially occupied regions to be part of Russia, in a move most countries condemned as illegal.

Biden has not spoken directly to Putin since Russia invaded Ukraine on February 24. And in March, he called Putin a “butcher” who “cannot stay in power.” However, he has indicated in recent weeks that Washington wishes to lure Putin down a diplomatic rampart, after months of battlefield losses and stalled gains for Moscow.

some contacts

Despite more than nine months of war, some contacts have continued between the two sides, often through third parties including Turkey and Saudi Arabia. A deal to partially lift a Russian naval blockade of Black Sea ports has allowed some grain shipments from Ukraine, and another deal on Russian fertilizers is in the works. Several large prisoner-of-war exchanges took place.

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But the fighting, which claimed the lives of tens of thousands of people, did not stop.

As their grip on winter tightens, Western countries are trying to ramp up their aid to help Ukraine counter Russian missile and drone attacks on energy infrastructure that has left millions without heat, electricity and water.

Ukraine has expelled Russian forces from swathes of occupied territory in recent weeks, including areas Russia claims it has annexed.

The Ukrainian General Staff said in its latest battlefield update that the town of Pakhmut in the east is now the main target of Moscow’s artillery attacks, while Russian forces in Kherson and the Zaporozhye region remain on the defensive.

Diplomats said that in an effort to cut down on the funds available for Moscow’s war effort, the EU agreed in principle to a cap of $60 per barrel of Russian oil transported by sea. The measure will need to be formally approved by all EU governments over the weekend.

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The head of the Foreign Affairs Committee of the Russian lower house of parliament, Leonid Slutsky, told the Tass news agency that the EU threatens its own energy security with a cap, violating market laws.

The Kremlin said Putin told German Chancellor Olaf Scholz in a phone call that the Western line on Ukraine was “destructive” and urged Berlin to rethink its approach.

In the Berlin statement of the call, Scholz’s spokesman said the chancellor condemned Russian airstrikes on civilian infrastructure and called for a diplomatic solution to the war, “including the withdrawal of Russian forces.”

Putin said he had no regrets about launching what he called a “special military operation” to disarm and “discredit” Ukraine. He described the war as a watershed moment when Russia finally stood up to an arrogant West after decades of humiliation following the fall of the Soviet Union in 1991.

Ukraine and the West say Putin has no justification for what they describe as an imperial-style war of occupation.

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attacks

On Friday, the governor of the region said that three people were killed and seven wounded in Russian shelling of the Kherson region over the past 24 hours.

Governor Yaroslav Yanushevich wrote on messaging app Telegram that the regional capital Kherson – which was recaptured by Ukrainian forces in mid-November – and other parts of the region were bombed 42 times in the same period.

Meanwhile, Russian officials said in Donetsk that three people were killed on Friday after Ukrainian forces shelled the city in eastern Ukraine.

Reuters could not independently confirm the battlefield reports.

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In a shocking development, several Ukrainian embassies abroad have received parcels containing animal eyes, Ukraine’s foreign ministry said on Friday, after a series of booby-trapped letters were sent to locations in Spain including Kyiv’s embassy in Madrid.

The managing director of the International Monetary Fund, Kristalina Georgieva, told the Reuters Next conference on Thursday that attacks on infrastructure are likely to increase the cost of keeping Ukraine’s economy running next year by up to $1 billion a month, and that aid to the country should be “on hand.” . .

Ukraine and the West say the strategy of overthrowing electricity and heat is deliberately intended to harm civilians, which is a war crime, something Moscow denies.

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Stock, bond and cryptocurrency investors remain on edge after a rough year for the markets

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This version is for personal, non-commercial use only. Distribution and use of this material is subject to our Subscriber Agreement and copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.

https://www.wsj.com/articles/stock-bond-and-crypto-investors-remain-on-edge-after-brutal-year-for-markets-11672403124

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Dow Jones losses are heading towards the closing bell as US stocks approach their worst year since 2008

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US stocks were trimming losses heading towards the closing bell on Friday, but were still on track to post their worst annual loss since 2008, as the harvest of tax losses combined with concern over the outlook for US corporate and consumer earnings took its toll.

How are stock indices traded?
  • Dow Jones Industrial Average
    DJIA,
    -0.22%

    It fell about 182 points, or 0.6%, to 33,039 points.

  • S&P 500 index
    SPX,
    -0.25%

    It fell nearly 26 points, or 0.7%, to about 3,824.

  • The Nasdaq Composite Index fell 72 points, or 0.7%, to about 10,406 points.

Stocks posted their biggest gains of the month on Thursday, with the Dow Jones rising 345 points, or 1.05%, to 33,221 as major stock indexes rebounded after losses incurred earlier in the week that pushed the Nasdaq Composite to a new closing low for the year. . The S&P 500 was on track on Friday to wrap up its fourth consecutive losing week, the longest streak of weekly losses since May, according to FactSet data.

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What drives the markets

US stocks traded lower on Friday afternoon, on pace to close the last trading session of 2022 with weekly and monthly losses.

Stocks and bonds have been crushed this year as the Federal Reserve raised its benchmark interest rate more aggressively than many expected, as it sought to crush the worst inflation in four decades. The S&P 500 is on track to end the year with a loss of nearly 20%, its worst annual performance since 2008.

“Investors were on edge,” Mark Heppenstahl, chief investment officer at Penn Mutual Asset Management, said in a phone interview Friday. “It seems as if being able to bring prices down might be a little easier given how bad the year has been.”

Stock indices have fallen in recent weeks as the recent rally inspired by hopes in the Fed’s policy focus faded in December after the central bank indicated it would likely wait until 2024 to cut interest rates.

On the last day of the trading year, the markets were also hit by selling to capture losses that could be written off from tax bills, a practice known as tax harvesting, according to Kim Forrest, chief investment officer at Bouquet Capital Partners. .

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Forrest added that an uncertain outlook for 2023 has also weighed in, as investors worry about the strength of corporate earnings, the US economy and consumer as the fourth-quarter earnings season approaches early next year.

“I think the Fed, and then earnings in mid-January — they’ll set the tone for the next six months. Until then, it’s anyone’s guess.”

The US central bank has raised its benchmark interest rate by more than four percentage points since the start of the year, pushing borrowing costs to their highest levels since 2007.

The timing of the first Fed rate cut will likely have a significant impact on markets, according to Forrest, but the outlook remains uncertain, even as the Fed tries to signal that it plans to keep interest rates higher for longer.

On the economic data front, the Chicago PMI for December, the latest major data release for the year, Came stronger than expected. Climbing to 44.9 from 37.2 in the previous month. Readings below 50 indicate contraction.

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In the coming year, Heppenstahl said, “we are likely to shift toward concerns about economic growth rather than inflation.” “I think the decline in growth will eventually lead to an even greater drop in inflation.”

Read: Stock market investors face 3 recession scenarios in 2023

Eric Sterner, chief information officer at Apollon Wealth Management, said in a phone interview on Friday that he expects the US to fall into a recession next year and that the stock market could see a new bottom as companies likely review their earnings. “I think the earnings outlook for 2023 is still very high,” he said.

The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite were all on pace Friday afternoon posting weekly losses of around 1%, according to FactSet data, at last check. For the month, the Dow was down about 5%, the S&P 500 was down about 7% and the Nasdaq was about to crash down about 10%.

Read: Value stocks are outperforming growth stocks in 2022 by a large margin historically

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As for bonds, Treasury yields rose on Friday as the US sovereign debt market was set to post its worst year since at least the 1970s.

The yield on the 10-year Treasury note
TMUBMUSD10Y,
3.879%

It rose about four basis points on Friday at 3.88%, according to FactSet data, in the latest check. Ten-year yields jumped about 2.34 percentage points this year through Thursday, on track for the biggest annual gain ever based on data going back to 1977, according to market data from Dow Jones.

Meanwhile, the yield on the two-year note
TMUBMUSD02Y,
4.423%

Up about 3.64 percentage points in 2022 through Thursday to 4.368%, 30-year return
TMUBMUSD30Y,
3.971%

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It jumped 2.03 percentage points over the same period to 3.922%. That marks the largest increase in a calendar year for each based on data going back to 1973, according to market data from Dow Jones.

Outside the US, European stocks capped their biggest percentage drop in a calendar year since 2018, with the Stoxx Europe 600
xxxp,
-1.27%
And the
It is an index of euro-denominated stocks, down 12.9%, according to market data from Dow Jones.

Read: A downturn in the US stock market is trailing these international ETFs as 2022 draws to a close

Companies in focus

Steve Goldstein contributed to this article.

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Fed’s reverse repo facility reaches $2.554 trillion by Reuters

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© Reuters. FILE PHOTO: The Federal Reserve Building in Washington, US, January 26, 2022. (Reuters)/Joshua Roberts/File Photo

Written by Michael S Derby

NEW YORK (Reuters) – A key facility used by the Federal Reserve to help control short-term interest rates saw record inflows on Friday, the last trading day of the year.

The New York Fed said its reverse repo facility took in $2.554 trillion in cash from money market funds and other eligible financial firms, beating the previous high seen on Sept. 30, when inflows totaled $2.426 trillion.

The cash rally was almost certainly tipping into record territory in the usual end-of-quarter pattern that could worsen further towards the end of the year. On those dates, for a variety of reasons, many financial firms prefer to deposit money in the central bank rather than in the private markets.

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The Fed’s reverse repo facility has been very active for some time. After seeing almost no absorption for a long time, money began to gravitate toward the central bank in the spring of 2021 and then grew steadily. Daily reverse repo usage has been steadily above the $2 trillion mark since June.

The reverse repo facility takes cash from qualified financial firms in what is an actual loan from the Federal Reserve. The current rate is 4.3%, a yield that is often better than rates for short-term private sector lending.

The reverse repo facility is designed to provide a soft floor for short-term rates and the federal funds target rate, and is the Fed’s primary tool for achieving its function and inflationary mandates. To mark the higher end of the range, the Fed is also pushing deposit-taking banks to deposit cash at the central bank, where the interest rate on reserve balances is now 4.4%.

The federal funds rate is currently set between 4.25% and 4.5% and is trading at 4.33% as of Friday, sandwiched between the reverse repo rate and interest on reserve balances.

There are no signs of shrinkage

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Even with the heavy use of reverse repo, Fed officials have always remained unconcerned about large outflows, even as some in financial markets worried about the potential for the Fed to drain the borrowing and lending lives of private money markets.

Fed officials also expected that as the central bank continues to raise interest rates with the goal of bringing down very high levels of inflation, the use of the reverse repo facility should decrease. But that hasn’t happened yet, and some in the markets now believe that the consistently high utilization of the Fed facility will be around for some time to come.

Research by the Federal Reserve Bank of New York indicated that banking regulation issues make demand for the Fed’s reverse repo instrument high. Meanwhile, the Kansas City Fed added its view that large inflows are related to limited private market investment opportunities and policy uncertainty.

Strong cash flows to the central bank may not have alarmed central banks, but they have driven their operations to an actual loss. The Federal Reserve finances itself through interest on the bonds it owns as well as the services it provides to the financial community. It usually makes a noticeable profit and by law returns it to the treasury.

Currently, the cost of paying interest on reverse repo agreements and reserve balances outweighs income. The Fed reported Thursday that as of Dec. 28, the accounting metric it uses to track losses was $18 billion. Many observers expect that the Fed’s plans to raise interest rates further and keep them at high levels will mean fairly large losses for the central bank over time, even if these losses will not affect the action of the Fed’s monetary policy.

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