Monday, March 7, 2022

We start a new week of trading with more violence ripping through the Ukraine countryside as Russia’s assault continues into its third week. More Western countries and global corporations work to disentangle their business interests from Russia, in order to shrink the country’s revenue streams and cause President Putin to reconsider his attempts to take over the neighboring country.

With Russia now annexing a third nuclear power plant in Ukraine — as well as its continued business ties to China and India — it’s not yet certain this will be successful. In the U.S., there are many American franchisees who own Lukoil gas stations, for instance, caught in the middle of this Russian embargo. However, to whatever extent the world can render the Russian economy anemic as the Ukrainian army and its greater citizenry makes a full takeover that much more difficult.

What we do know is that oil prices continue to spike, with West Texas Intermediate crude (WTI) and Brent crude price per barrel jumping another +2.4% and +3.4%, respectively. Oil prices are now near 13-year highs, with nothing meaningfully apparent to bring them down in the near-term. Meanwhile, gold prices are also climbing, re-establishing itself as an historic safe haven investment, while most crypto currencies lag (though Bitcoin is up +0.3% in early markets.

That said, market futures are well off the lows seen 90 minutes before the opening bell today: the Dow had been -240 points, -90 points on the Nasdaq and -25 on the S&P 500. Twenty minutes before the regular session commences, we see -60 on the Dow, -25 on the Nasdaq and -6 points on the S&P 500. Futures look ready to set up in the green before long, if these trends hold.

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