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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 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.

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.