The main reason the European markets are down more than the U.S. is because Russia is a major trading partner with Europe…said Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Stock futures recovered from overnight losses as investors digest President Biden’s State of the Union speech, and a slight de-escalation in the Russia-Ukraine conflict.
Geopolitically, President Biden announced that the U.S. would close its airspace to Russian planes during the open of his State of the Union address, however overnight, Russia expressed willingness to resume talks with Ukrainian leadership today and that is raising hopes for a ceasefire deal, fueling moderate risk-on money flows.
Economically, the Eurozone HICP Flash was hot with the headline jumping to 5.8% vs. (E) 5.3% which is adding to angst about stagflation.
Today, there are a few data points to watch including: Motor Vehicle Sales (E: 14.6M) and the first look at official February jobs data in the form of the ADP Employment Report (E: 320K).
Additionally, there are two Fed speakers around the time of the open: Evans (9:00 a.m. ET) and Bullard (9:30 a.m. ET) before Fed Chair Powell will begin his semi-annual Congressional testimony at 10:00 a.m. ET.
Bottom line, the Russia-Ukraine conflict will continue to dominate the headlines and markets today, and any de-escalation could trigger a further relief rally. However, investors will be watching Powell closely for any signs of a change in policy which could also impact markets.
What’s in Today’s Report:
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.
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.
What’s in Today’s Report:
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.
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.
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.
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.
What’s in Today’s Report:
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.
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.
