Morning Minutes

Ukraine and Iran Situations Continue to Influence Trading




With a long weekend approaching in the US and Canada, trading has been choppy across world markets. US index future have stabilized and bounced back slightly with morning gains of 0.2%-0.3% coming off of yesterday’s US index losses of 1.8%-2.8%.  European trading is mixed with the Dax down 0.4% and the FTSE up 0.3%.

The political situation in Ukraine remains fluid and with the Winter Olympics wrapping up this weekend there remain all kinds of threats, accusations, speculations, rumors and denials over whether an invasion of Ukraine by Russia may be imminent or not. The question for today is whether given the current level of uncertainty, whether bargain hunters could be willing to step in ahead of a 3-day weekend or not. Gold, which has attracted renewed attention lately as a haven for capital in times of trouble, is holding steady today pretty much right on the $1,900/oz level.

Meanwhile, action in Crude Oil indicates that political developments can cut both ways. There have been overnight reports in the media suggesting that talks between the US and Iran have been progressing and that a framework may be coming together that could allow Iran to resume exports (which could potentially be welcomed considering that some OPEC+ countries have been having problems meeting their production quotas). Speculation on a potential deal has knocked WTI Crude Oil down 2.3% and back under $90.00/bbl this morning.

Overnight earnings reports have been mixed. Air Canada reported its Q4 revenues were up 30% from Q3 as the airline business recovered last fall. Management noted it continues to restore services, call back employees from layoffs and has even started hiring new employees again.  Farm equipment producer Deere beat expectations ($2.92 vs street $2.26). Positive results weren’t enough for Roku or DraftKings which are down 26.7% and 16.4% in premarket action this morning after both companies’ managements warned about rising costs.

Canadian retail sales struggled in January falling 1.8% which was not quite as bad as the -2.1% street estimate. Excluding the auto sector, however, retail sales fell by 2.5% which was worse than the 2.0% decline the street had anticipated.

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Colin Cieszynski, Chief Market Strategist

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

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