Morning Minutes

Gold, Oil and USD Soar, Stocks Plunge as Russia Attacks Ukraine




Overnight Russia expanded its military operations in Ukraine to include missile and infantry attacks in several parts of the country. This news sent equity markets, which had already been trending downward in recent days in fear that tensions could boil over, off a cliff, and capital rushing into energy and traditional haven assets.

Europe has been hit particularly hard today with the Dax diving 5.1% and the FTSE falling 3.2%. Currencies are also taking a hit with the Euro down 1.3% and the Pound down 1.2% against the US Dollar. Dow futures are down about 800 points or 2.4%, while NASDAQ futures are down 3.3%, adding to yesterday’s losses of 1.4% for the Dow, 1.8% for the S&P 500 and 2.6% for the NASDAQ.

With Russia a major oil & gas producer and Ukraine a key pipeline transit country, energy prices are soaring this morning with WTI up 8.0% and sitting just below $100.00/bbl while Brent Crude is up 8.3% and trading just below $105.00/bbl, levels last seen in the spring of 2014.

The flow of capital out of risk markets and into defensive stances can be seen most clearly in the divergence of precious metals relative to cryptocurrencies. Gold is currently up 2.8% and approached $2,000/oz overnight, and silver is up 3.2%. In contrast, Bitcoin is down 6.1% and has fallen back toward $35,000, while Ethereum is down 9.6%.

Other business news has been overshadowed by the big political developments overseas. Royal Bank of Canada kicked off bank earnings season with a positive report ($2.87 vs street $2.72).

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Colin Cieszynski, Chief Market Strategist

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

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