1. A lower $130 crude oil price halved Dow futures gains
The U.S. stock futures market cut in half the declines that had been seen earlier in the week. This saw the Dow futures decline by over 500 points at premarket lows. The price of American oil also fell from Sunday’s highs, after the price briefly reached over $130 a barrel. According to a Russian statement, the country would cease attacking four Ukrainian cities, including the city of Kyiv, to allow civilians to flee. Ukraine has accused Moscow of trying to manipulate the cease-fire by allowing only civilians to evacuate to Russia and Belarus instead of allowing civilians from all of Ukraine to leave.
In the coming week, the Dow Jones Industrial Average, S&P 500 and Nasdaq are expected to decline. There was a correction in both the S&P 500 and the Nasdaq. The Nasdaq was less than 3 percentage points from falling into a bear market, defined as a drop of 20% or more from recent highs. Monday also saw bond investors sold bonds, which sent the 10 year Treasury yield to around 1.79 %.
2. Spot gold tops $2,000; U.S. oil spikes $4 per gallon
As expected, U.S. oil prices pulled back from their 14-year highs on Sunday night, trading at a slightly lower level of around $118 a barrel on Monday. The rise in crude oil prices is owing to concerns about supply disruptions resulting from Russia’s invasion of Ukraine. This invasion is now well into the second week of the conflict. According to AAA that the average price for a gallon of gasoline in the United States topped $4 on Sunday. This marks the highest price since July 2008 when inflation is not adjusted.
In the early hours of Monday, spot gold topped $2,000 per ounce for the first time in 112 years. However, it slipped back below that level as investors rushed to buy the precious metal. This is because the precious metalis because it is viewed as an inflation hedge and a haven in times of geopolitical turmoil. As of Monday, gold futures approached the $2,000 mark but have not breached it yet.
3. There are shaky signs of a limited cease-fire between Russia and Ukraine
Russia and Ukraine are scheduled to begin the third round of talks on ending the fighting on Monday, as a joint meeting of the Russian Foreign Minister Sergey Lavrov and the Ukrainian Foreign Minister Dmytro Kuleba has been set for Thursday in Antalya, Turkey, according to Turkish Foreign Minister Zeynep Tufekci.
- After their cease-fire, Russian forces continued to pound some Ukrainian cities with rockets even after their cease-fire had been approved. Fighting has continued in some areas, suggesting there will no longer be a ceasefire. More than one million Ukrainians have fled their country.
- On Sunday, Secretary of State Antony Blinken said on CNN that the U.S. and its allies are considering banning the import of Russian oil and natural gas. This would further put pressure on Russia.
4. GameStop’s chair reveals big stake in Bed Bath & Beyond
In premarket trading on Monday, Bed Bath & Beyond shares surged 65% after GameStop chairman Ryan Cohen revealed that his investment company RC Ventures holds more than 10% of the retailer’s stock. According to Cohen, co-founder of the online pet retailer Chewy, in a letter he wrote to the Bed Bath & Beyond board of directors, the company is dealing with supply chain issues as well as reversing market share losses. Also, Cohen writes that Bed Bath & Beyond should consider strategic alternatives, such as separating its subsidiary Buybuy Baby from the parent company and selling off the company altogether. In last year’s meme stock craze, Bed Bath & Beyond’s shares had spiked to the upside several times, but the shares were unable to hold on to those gains throughout the year.
5. Gigafactory approval in Berlin ends Tesla’s stock overhang
According to Wedbush analyst Dan Ives who is well known as a Tesla bull, there has been a “major lift” on Tesla’s stock since German authorities announced Friday that the U.S. electric automaker would be able to start production at a new factory in Berlin as early as June. There was a plan for Tesla to begin producing vehicles at its plant by the first of the summer of 2021, but the Covid pandemic, complications in the supply chain, as well as disagreements with environmentalists have slowed the company’s progress in the past few months. It was reported last October that Tesla’s market cap soared to over $1 trillion for the first time ever, but since then the stock has steadily dropped and it now stands just under $850 billion. The shares of Tesla rose roughly 1% in premarket trade on Monday.