Why the SWIFT Ban and Other Sanctions Matter

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What’s in Today’s Report:

  • Why the SWIFT Ban and Other Sanctions Matter
  • Update on Value/Growth Rotation

It is a moderately risk-off morning with stock futures down just over 0.5% while Brent crude prices have jumped back above $100/barrel and the 10-Yr Treasury yields have dipped below 1.75% amid the ongoing conflict in Ukraine.

Western allies added more sanctions on Russian financial institutions overnight while a 40-mile long Russian military convoy continued to make progress towards Kyiv however high-level diplomatic talks between Russia and Ukraine are expected to resume today.

Looking at the calendar, there are two economic reports to watch today: ISM Manufacturing Index (E: 58.0) and Construction Spending (E: -0.2%) as well as one Fed speaker: Bostic (2:00 p.m. ET).

But, the market will remain largely focused on the Russia/Ukraine conflict and whether or not there is any progress in the ongoing diplomatic talks. As has been the case since last week, any deterioration in the conflict will result in further risk-off money flows across asset classes while any sense of de-escalation could support a continued relief rally.

Tom Essaye Quoted in Bloomberg on February 22, 2022

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What Ukraine-Russia Tensions Mean for Stocks and Investor Portfolios

The most important factors remain Fed tightening and economic growth…wrote Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter. Click here to read the full article.

Ukraine Update and Why Future are Down

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What’s in Today’s Report:

  • Ukraine Update and Why Futures Are Down
  • Switching Focus Back to the Fed
  • Weekly Market Preview:  Powell Testimony Wed/Thurs
  • Weekly Economic Cheat Sheet:  Jobs Week

Futures are sharply lower as markets react to additional sanctions against Russia, including removing select Russian banks from the SWIFT system. The additional sanctions and historic isolation of Russia by the global community are increasing economic uncertainty.

Positively, Ukraine and Russia are having peace talks today, and hopefully, that leads to a ceasefire sooner than later.

There were no notable economic reports overnight and no material economic reports today, so Russia/Ukraine headlines will drive trading, and any reports of a cease-fire will be a positive for markets.

Tom Essaye Interviewed on Yahoo Finance on February 24, 2022

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Fed: ‘There is danger on either side’ of rate hikes, Sevens Report founder says

We just had 7% Q4 2021 GDP, and we had very low unemployment. So the Fed will raise rates. I think they probably…said Tom Essaye, founder of the Sevens Report. Click here to read/watch the interview.

Tom Essaye Quoted in Bloomberg on February 24, 2022

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Bloomberg Wealth: What Does the Ukraine Crisis Mean for Investors?

While Russia/Ukraine will dominate near-term headlines, it’s not what’s going to determine the medium- and longer-term direction of this market…wrote Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter. Click here to read the full article.

Tom Essaye Quoted in Bloomberg on February 24, 2022

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Bitcoin’s Digital Gold Luster Fades as Customary Havens Win Out

Gold is doing exactly what it should be doing right now, but it’s a much more mature asset and it’s got a proven history in these types of conflicts of how it trades…said Tom Essaye. Click here to read the full article.

Tom Essaye Quoted in Bloomberg Quint on February 24, 2022

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Bitcoin’s Digital Gold Luster Fades as Customary Havens Win Out

Bitcoin is much more of a momentum and risk-driven asset than it is the independent store of value that people want it to become, it’s not there yet…said Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter. Click here to read the full article.

Why Stocks Rebounded on Thursday

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What’s in Today’s Report:

  • Why Stocks Rebounded on Thursday
  • What’s Next for Russia/Ukraine (From a Market Perspective)

Futures are moderately lower (about 1%) as there were no major changes in Ukraine overnight and as markets digest Thursday’s rebound.

Russian troops have arrived at Kiev and there are reports of heavy fighting near the city, and many analysts expect Kiev to fall as soon as today or in the coming days.

There was no notable economic data overnight.

Today obviously markets will be focused on Ukraine headlines, but as long as there are no signs of the conflict spreading beyond Ukraine then it shouldn’t be too much of a direct impact on stocks.  Outside of geo-politics, the key economic report today is the Core PCE Price Index (E: 0.5% m/m, 5.2% y/y) and if that is much stronger than expectations, it will weigh on futures as it will make the Fed more hawkish, and if it shows signs of inflation peaking, it could extend yesterday’s rally.   We also get Durable Goods Orders (E: 0.5%), Consumer Sentiment (E: 61.7) and Pending Home Sales (E: 0.8%) but those numbers shouldn’t move markets unless they are large misses vs. expectations.

Tom Essaye Quoted in OICanadian.com on February 22, 2022

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Wall Street opens with losses of up to 1% and the markets collapse amid geopolitical tension

The situation between Russia and Ukraine remains very fluid and tensions remain high, so in the short term it will continue to be an obstacle to actions…Sevens Report said in a note. Click here to read the full article.

Tom Essaye Quoted in Barron’s on February 22, 2022

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The Russia Issue Is Hurting the Stock Market. How Things Could Get Worse.

Regarding Ukraine, investors will await the announcement of new sanctions from the west against Russia, and depending on how severe they are, it could add to the selling pressure on stocks…wrote Tom Essaye, founder of Sevens Report Research.  Click here to read the full article.