Oil Surges as Russia Talks Stall

Crude Oil is rallying this morning, with a 5.1% gain pushing it back above $60.00/bbl and closer to $61.50. Energy markets are responding to the news that US President Trump has cancelled a planned meeting with Russian President Putin and launched new sanctions against Russian energy countries after the latest round of Ukraine talks stalled.

Metals are also bouncing back today on this increase in political risk. Gold is up 1.7%, Silver is up 2.4%, Platinum is up 3.7%, and Copper is up 3.7%.

Meanwhile earnings reports continue to roll out. Tesla* fell short of expectations and is down 3.8% premarket. IBM and Lam Research beat the street but are down 7.6% and 2.3% premarket, suggesting some profit taking against technology results or soft guidance. On the other hand, American Airlines is up 4.9% premarket after both results and guidance beat expectations. Later today, results are due from Intel*, Newmont, and some of the US railroads.

Equity markets have been mixed overnight and into this morning. US index futures are down 0.2%-0.3% adding to yesterday’s US index losses of 0.7%-0.9%. Asia Pacific trading saw the Nikkei drop 1.3% and the Hang Seng rise 0.7%. In Europe, the Dax is down 0.3% and the FTSE is up 0.6%.

In economic news, Canada retail sales increased less than expected last month (0.7% vs Street 1.2%). Tomorrow brings UK retail sales and flash PMI reports.

*Shares of Tesla, and Intel, are held in portfolios managed by SIA Wealth Management.

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