Weekly Market Update: Markets convulse then reverse after Russia invades Ukraine
2022-02-25T16:12:21.88
As predicted by President Biden and other Western leaders, Russia did commence a large scale military offensive into the Ukraine this week. As the markets woke up to this reality, Thursday saw the NASDQ officially open in bear market territory as investors rushed for safety, pushing down stocks and lifting the prices of oil, gold, and government bonds. Brent crude broke above $100 for the first time since 2014, while the Ruble and the Russian stock market came under considerable pressure.
Central bankers said they will monitor the impacts of the Russian invasion, particularly on energy markets and inflation. But hawks like the Fed’s Bullard continued to express the need to start normalizing policy given that sanctions on Russia will not have a great deal of direct impact on Western economies. Stock markets saw wild volatility, with a 1,000 DJIA swing on Thursday and European bourses on Friday posting their best gains in months, as trader bet on a short term bottom. For the week the S&P gained 0.8%, the DJIA slipped 0.1%, and the Nasdaq rose 1.1%.
In corporate news this week, Home Depot posted a beat on its top and bottom line but shares dipped amid declining margins and signs the pandemic boom is moderating. Macy’s notched strong EPS and Rev for its holiday quarter though, like most retailers, continued to face headwinds from inflation and a labor market. Automotive components original equipment manufacturer Tenneco agreed to be acquired by Apollo for $7.1B, a nearly 100% premium. Volkswagen said it was in late-stage talks regarding a potential spinoff of its Porsche unit in order to raise cash as it transitions to electric vehicles. Soo Kim’s Standard General announced it would acquire broadcaster Tegna for $5.4B, ending a takeover saga that had lasted many years and involved several potential suiters.
SUN 2/20
*(CN) CHINA PBOC MONTHLY LOAN PRIME RATE (LPR) SETTING: LEAVES BOTH 1-YEAR AND 5-YEAR RATES
(RU) US Biden Plan would cut correspondent banking relationships between US and Russia banks as part of initial sanctions package - Press
MON 2/21
(DE) Germany Jan PPI M/M: 2.2% v 1.5%e; Y/Y: 25.0% v 24.4%e (highest since 1949)
*(FR) FRANCE FEB PRELIMINARY MANUFACTURING PMI: 57.6 V 55.5E (15th month of expansion and highest reading since July 2021)
*(DE) GERMANY FEB PRELIMINARY MANUFACTURING PMI 58.5 V 59.8E (20th month of expansion)
*(EU) EURO ZONE FEB PRELIMINARY MANUFACTURING PMI: 58.4 V 58.7E (20th month of expansion)
*(UK) FEB PRELIMINARY PMI MANUFACTURING: 57.3 V 57.0E (21st straight expansion)
(RU) Donetsk separatists reportedly claim they need military and financial aid from Russia - Russian press
(RU) Russia Army (Southerm Military District) said to have prevented border violation from Ukraine; says 5 Ukraine soldiers killed in situation
(RU) Donbas separatist groups in Eastern Ukraine said to have asked Russia to recognize independence - Russian tv
(RU) President Putin: Ukraine does not plan to fulfill the Minsk agreements; To discuss Donbas situation and should discuss separatist recognition - comments attributed to Russia's security council extra-ordinary meeting
(RU) Russia President Putin: Eastern Ukraine territories are ancient Russian lands; Ukraine has become US colony with a puppet government - national tv address
(EU) ECB's Villeroy (France): No need to decide rate-hike dates now; Reiterates call to end APP purchases (conventional QE) around Q3 2022
*(RU) RUSSIAN PRESIDENT PUTIN FORMALLY ORDERS TO RECOGNIZE DONBAS LPR AND DPR SEPARATISTS - NATIONAL TV ADDRESS; Putin also ordered troops from Russia to enter the two breakaway regions of Ukraine [Donetsk and Luhansk]
XOM Workers at Beaumont (Texas) refinery have ratified contract offer; the move paves the way to ending the 10-month lockout - US financial press
MPC Louisiana refinery [578K bpd] had an explosion and fire; the cause of the incident has not yet been disclosed; officials have given the all-clear sign related to the refinery - US press
5.HK Reports FY21 Adj pretax $21.9B v $12.1B y/y, Adj Rev $50.09B v $50.4B y/y; to buyback $1.0B in shares
TUES 2/22
(RU) Reportedly Russia may recognize Ukranian Separatist claims over more land than already recognized - press
VOW3.DE Notes it is in advanced discussions with Porsche Automobil Holding SE regarding a potential IPO of Porsche AG
*(DE) GERMANY FEB IFO BUSINESS CLIMATE SURVEY: 98.9 V 96.5E (2nd straight improvement)
(RU) Russia Foreign Min Lavrov: Ukraine does not have a right to sovereignty
(RU) Russia Deputy Foreign Min Andrey Rudenko: Russia recognized the separatists within the border they perform their duties and jurisdiction in
(DE) German Chancellor Scholz: Russia's decision is serious breach of international law; No certification of Nord Stream 2 can occur at this time - statement on Russia-Ukraine situation
HD Reports Q4 $3.21 v $3.20e, Rev $35.7B v $34.6Be; Raises Quarterly dividend 15.2% to $1.90 from $1.65 (indicated yield 2.19%)
M Reports Q4 $2.45 v $2.00e, Rev $8.66B v $8.45Be; Completes business review and will NOT separate digital assets; New $2B share repurchase program authorized; Raises Quarterly dividend 5% to $0.1575 from $0.15 (indicated yield 2.45%);
TGNA Confirms to be acquired by Standard General L.P. for $24.00/shr in $5.4B cash deal
EXPD Reports Q4 $2.66 v $2.02e, Rev $5.40B v $4.26Be
(US) Feb Philadelphia Fed Non-Manufacturing Index: +15.9 v -16.2 prior
*(US) FEB PRELIMINARY MARKIT MANUFACTURING PMI: 57.5 V 56.0E
*(US) FEB RICHMOND FED MANUFACTURING INDEX: 1 V 10E
*(US) FEB CONSUMER CONFIDENCE: 110.5 V 110.0E
(DE) German Chancellor Scholz: A full invasion of Ukraine must be prevented; We are in a position to decide on further sanctions if there will actually be a complete military invasion of Ukraine by Russia
PANW Reports Q2 $1.74 v $1.65e, Rev $1.32B v $1.28Be
(US) Sec of State Blinken: Cancels meeting with Russia's Lavrov following invasion of Ukraine
*(NZ) RESERVE BANK OF NEW ZEALAND (RBNZ) RAISES OFFICIAL CASH RATE (OCR) BY 25BPS TO 1.00%; AS EXPECTED
992.HK Reports Q3 Net $640M v $395M y/y, Rev $20.1B v $17.3B y/y
WEDS 2/23
(AT) ECB’s Holzmann (Austria): It is possible for ECB to hike rates before ending conventional QE program; Council should consider two rate hikes in 2022
BN.FR Reports FY21 Net €1.92B v €1.96B y/y, Recurring Op €3.34B v €3.32B y/y, Rev €24.3B v €23.6B y/y; Local First implementation on track; Europe transformation completed
STLA Reports FY21 Net €13.4B v €4.79B y/y, Adj EBIT €18.0B v €9.22B y/y; Rev €152.1B v €47.7B y/y
(RU) TTN Research alert: on Feb 27th, Belarus will hold a constitutional referendum that includes a vote on end of 'nuclear-free status' to make it legal to host Russian nuclear weapons
MUV2.DE CEO: Nord Stream 2 pipeline insurance contract has been canceled - conf call comments
*(EU) EURO ZONE JAN FINAL CPI Y/Y: 5.1% V 5.1%E (record high); CPI CORE Y/Y: 2.3% V 2.3%E
TEN To be acquired by Apollo Funds for $20.00/shr in cash valued at $7.1B
(UR) US officials reportedly have given intel to Ukraine Pres Zelenskiy that indicates Russia is preparing to conduct a full-scale invasion within 48 hours - Newsweek
(ES) ECB’s de Cos (Spain): Inflation spike is largely unexpected and lasting longer than expected
(US) Association of American Railroads weekly rail traffic report for week ending Feb 19th: 497.8K total units, +32% y/y
(UR) US Sec of State Blinken: Believes Russia will invade Ukraine before night ends - NBC News
*(KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE AT 1.25%; AS EXPECTED
BRENT OIL PRICE MOVES ABOVE $100/BARREL (1st time since 2014)
(RU) US officials: Sanctions will shock Russian financial system, hit the markets and hobble industry and weigh on growth - US financial press
THRS 2/24
ABI.BE Reports Q4 $0.74 v $0.84e, adj EBITDA $4.88B v $4.80Be, Rev $14.2B v $13.7Be
(CN) China Foreign Ministry Spokesperson Hua Chunying: Russian forces in Ukraine is not an invasion as described by some foreign media
(RU) Reportedly UK PM Johnson is pushing for Russia to be removed from the SWIFT payment system – press
(RU) RUSSIAN PRES PUTIN: WHAT IS HAPPENING IS FORCED MEASURE; WEST REFUSED TO GIVE GROUND ON RUSSIA'S SECURITY DEMANDS - comments after meeting with Russian businessmen
(UK) UK to freeze VTB Bank assets, immediately; To impose sanctions on over 100 Russian individuals and entities; Confirms calling on expulsion from SWIFT payment system
(UR) Pres Biden tweets: G7 leaders agreed to move forward with devastating sanctions packages against Russia
(RU) Pres Biden: Russian military began brutal attack; Pres Putin is a the aggressor, rejected diplomacy - press conf on Ukraine-Russia conflict
(EU) European leaders to impose sanctions on Russian financial sectors, visa policy, energy, transport and impose export controls - statement
COIN Reports Q4 $3.32 v $1.95e, Rev $2.49B v $1.81Be
DELL Reports Q4 $1.72 v $1.95e, Rev $28.0B v $27.4Be; Declares initial quarterly div $0.33/shr, expects FY23 Dividends of ~$1.0B
FRI 2/25
BAS.DE Reports Q4 Net €898M v €1.06B y/y, adj EBIT €1.23B v €1.4Be, Rev €19.8B v €18.5Be
(RU) Russia govt said to be preparing its own sanctions list to hit back at the West - press
(UR) Adviser to Ukraine President Podolyak: If Moscow says they are ready to talk, including on neutral status, we are not afraid of this; We want peace
(RU) Russia govt spokesperson Peskov: Ukraine neutrality move is move 'toward positive'; Expectations of Kyiv remain the same; Russia does not change its position like a girlECB’s Lane (Ireland, chief economist) said to see ECB Staff Projection to significant raise the 2022 inflation outlook but would still see it below the ECB target in the medium term - press
(UR) UKRAINE PRESIDENT ZELENSKIY CALLS FOR NEGOTIATIONS WITH RUSSIAN PRES PUTIN - PRESS
ABC AmerisourceBergen, Cardinal Health and McKesson approve Opioid settlement agreement; Settlement will provide thousands of communities across US with up to ~$19.5B over 18 years
(RU) Russia President Putin said to be willing to conduct high-level negotiations with Ukraine - Chinese press
(EU) EU said to be planning to sanction personally Russia Pres Putin and Russia Foreign Min Lavrov; To freeze their assets - FT
(US) JAN PCE DEFLATOR M/M: 0.6% V 0.6%E; Y/Y: 6.1% V 6.0%E
(US) Nevada reports Jan casino gaming Rev $1.08B, +41.6% y/y; Las Vegas strip Rev $567.2M, +76.4% y/y
(US) JAN PENDING HOME SALES M/M: -5.7% V 0.2%E; Y/Y: -9.1% V -1.8%E
(RU) German Finance Minister: We are open to cutting Russia off SWIFT
