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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.

 

Tom Essaye Quoted in Coinspeaker on February 23, 2022

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Dow Jones Tanks as Tension between Russia and Ukraine Escalates

The Russia/Ukraine situation remains very fluid, and tensions remain high, and in the short term that will remain a headwind on stocks…said Tom Essaye, founder of the Sevens Report. Click here to read the full article.

Tom Essaye Quoted in Big News Network on February 23, 2022

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The Russia/Ukraine situation remains very fluid, and tensions remain high, and in the short term that will remain a headwind on stocks…Tom Essaye, founder of the Sevens Report told CNBC Tuesday. Click here to read the full article.

What the Russian Attack on Ukraine Means for Markets

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What’s in Today’s Report:

  • What the Russian Attack on Ukraine Means for Markets
  • What’s Next in This Situation
  • What We Are Doing Today

Futures are down close to 3% as Russia launched an attack on Ukraine beyond the Donbas region.

Early Thursday morning Russia launched missiles at numerous targets in Ukraine and landed troops throughout the country, dramatically escalating the conflict.

Commodity prices shot higher, including oil, which is up more than 7%

Today focus will obviously be on the Russian attack and how far it goes, along with the severity of the international sanctions against Russia.  Anything that implies a further escalation will weigh further on markets and send commodity prices even higher.

Outside of Russia/Ukraine, there are numerous economic reports and Fed speakers:  Revised Q4 GDP (E: 7.0%), Jobless Claims (E: 230K). Fed Speak: Barkin (9:00 a.m., 12:00 p.m. ET), Bostic (11:10 a.m. ET), Mester (12:00 p.m. ET), Waller (8:00 p.m. ET).

Hedging Uncertainty with Russia/Ukraine

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What’s in Today’s Report:

  • Hedging Uncertainty with Russia/Ukraine
  • PMI Composite Flash Takeaways (Strong Report)
  • Consumer Confidence Index: Chart

Stock futures are enjoying a bounce this morning, tracking global equity markets higher as investors view the initial rounds of sanctions on Russia as less severe than feared while inflation data out of Europe was mildly encouraging.

Economically, the Eurozone’s Narrow Core HICP reading was -0.9%, down from +0.4% in December suggesting price pressures may finally be peaking in parts of the world.

Looking into today’s session, there are no notable economic reports to watch and just one Fed speaker ahead of the bell: Daly (9:00 a.m. ET).

There is a 5-Yr Treasury Note auction at 1:00 p.m. ET that could move markets but investor focus is likely to remain on any developments with the Russia/Ukraine situation.

After the close yesterday, it was reported that the scheduled meeting this week between Blinken and Lavrov was called off, which was a negative development but if we see a new meeting agreed to, or any signs of further de-escalation in the conflict today, stocks could enjoy a potentially sizeable relief rally. Conversely, further aggressive actions in Ukraine by Russia and/or more severe sanctions being announced by the West would likely drive more risk-off money flows.

Tom Essaye Quoted in Yahoo News on February 21, 2022

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Ukraine-Russia crisis: Stock futures tank as situation escalates

The reasons stocks are down on that news is that people fear that is the start of a full-on invasion of Ukraine. And, if that happens, then we can expect a serious test of the January lows… Sevens Report Research founder Tom Essaye told Yahoo Finance. Click here to read the full article.

Tom Essaye Quoted in Blockworks on February 21, 2022

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Russian Finance Ministry Says Crypto Shouldn’t Be Legal Currency

It is a similar situation to the 2014 Russian invasion of the Crimean Peninsula, once part of Ukraine…wrote Tom Essaye, founder of Sevens Report Research. Click here to read the full article.

Ukraine Update

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What’s in Today’s Report:

  • Bottom Line: Real Focus Remains on the Fed and Growth
  • Weekly Economic Cheat Sheet: Rising Threat of Stagflation?

Stock futures are down slightly this morning but well off the overnight lows as traders digest the latest geopolitical developments between Russia and Ukraine.

Russian President Putin recognized the independence of two “breakaway” regions in eastern Ukraine yesterday, but the risk of a full scale invasion of Ukraine still remains low.

Looking into today’s session, there are several economic reports due to be released including: Case-Shiller Home Price Index (E: 1.1%), FHFA House Price Index (E: 1.0%), PMI Composite Flash (E: 51.9), and Consumer Confidence (E: 110.0). There is also one Fed speaker on the schedule: Bostic (3:30 p.m. ET).

Finally, there is a 2-Yr Treasury Note auction at 1:00 p.m. ET and with the underlying market focus still on future Fed policy, a soft outcome (hawkish) could add to the current geopolitically fueled market volatility.

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 today. Additionally, as of now, Blinken and Lavrov are still scheduled to meet this week but if that meeting is canceled that will suggest a more severe conflict is imminent, resulting in more risk-off money flows.