Morning Minutes

Ukraine, Inflation, Amazon and ECB Share the Spotlight




Yesterday’s market action which saw gold and oil sell off and stock markets around the world stage a relief rally has turned out to be a dead cat bounce with previous cautious trends reasserting themselves amid a flurry of developments.

With peace talks between Russia and Ukraine breaking down again, crude oil has rebounded this morning with WTI up 4.2%. Gold is trading back up above $2,000/oz again with a gain of 1.1%, and Copper is up 2.0%. Yesterday’s rebound rallies in stock markets and cryptocurrencies have also come to an abrupt end. The three main US index futures contracts are down 1.0% to 1.5% with NASDAQ futures leading the way lower. In Europe, the Dax is down 3.6% and the FTSE is down 1.6%. Bitcoin has dropped back under $40,000 with a 6.5% decline, while Ethereum is down 3.5%.

Even with war raging in Eastern Europe, central banks remain under pressure to tighten monetary policy. The European Central Bank, after pledging support for Ukraine and its intent to maintain liquidity, announced that it is tapering its main asset purchase program from €40B in April to €20B in June and that it plans to wrap up the program in the summer quarter, while leaving the door open to acting faster if needed. The ECB also announced that its Pandemic Emergency Purchase Programme is ending this month.  The Euro jumped about 0.4% on this news, erasing losses from earlier in the morning.   

Signs of stagflation continue to emerge. US consumer prices increased by 7.9% % in February, in line with street expectations, but up from 7.5% last month. US weekly initial jobless claims, meanwhile, were worse than expected (227K vs street 216K).

It has been a while since we had any notable corporate news. is up nearly 5.0% in premarket trading this morning after the company announced plans for a 20-for-1 stock split and a $10B share buyback. Historically, companies have announced stock splits to make their share prices more accessible to small investors. With Alphabet having announced a similar split last month, however, there has been speculation in the media this morning that both companies may be trying to set their stocks up for possible inclusion in the Dow Jones Industrial Average at some point in the future.    

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Colin Cieszynski, Chief Market Strategist

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

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