Morning Minutes

Crude Oil Soars, Stocks Slide as March Arrives and Ukraine War Continues




March has come in like a lion with world markets in turmoil once again. With sanctions against Russia rolling out and its troops reportedly advancing on Ukraine’s capital Kiev, capital continues to rush into defensive havens. US bond prices are climbing again and have pushed the 10-year US treasury note yield back down toward 1.75%. The US Dollar is up another 0.5% against the Euro, but demand for alternative currencies has also increased with gold up 1.0% to trade near $1,920/oz and Bitcoin jumping 7.3% to trade near $45,000.

With the risk of supply disruptions from the Ukraine conflict still elevated, crude oil prices are popping again today. WTI crude is up 5.2% and trading just above $100.00/bbl, while Brent Crude is up 5.7%. US Gasoline is up 3.8% and has broken through the $3.00/gallon barrier for the first time since 2014. OPEC+ meets later this week to discuss production levels.

In this uncertain environment, European markets are nosediving again today with the Dax down 2.8% and the FTSE down 1.2%. US index futures are all down about 0.8% this morning adding to yesterday’s afternoon retreat in North America.

Canadian bank earnings season resumes today with more positive results, this time from Bank of Montreal ($3.89 vs street $3.28) and Bank of Nova Scotia ($2.15 vs street $2.05). TD Bank, who announced a big US acquisition yesterday, reports results on Thursday. In the US Target ($3.19 vs street $2.86, up 11.2% premarket) beat expectations while Zoom Communications beat the street on earnings ($1.29 vs street $1.06) but missed on sales guidance ($4.55B vs street $4.71B).

The arrival of a new month brings the usual flurry of economic reports starting today with Manufacturing PMI reports. China’s number climbed back above 50 into expansion territory, while European numbers in the high 50s indicated moderate growth, but generally not as much as investors had hoped. US ISM manufacturing PMI is due at 10:00 am EST with the prices paid (street 74.6) inflation component having the potential to overshadow the headline (street 58.0) and new orders (street 59.1) measures.

Canadian GDP grew by 6.7% in Q4, better than the 6.2% growth rate the street had expected and an acceleration from the 5.5% Q3 annualized growth rate. Canadian manufacturing PMI is due at 9:30 am EST (street 56.4).  

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

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