February 28, 2022

Markets:

U.S. stock futures moved lower early Monday but were off their morning lows as Russian and Ukraine officials gathered to discuss a potential end to the hostilities between the two sides.

The moves come amid turmoil over the conflict between Russia and Ukraine, where Ukrainian forces have held key cities including the capital of Kyiv. At the same time, Ukraine officials have arrived near the border for talks with Russian officials.

In the most recent financial developments, the Central Bank of Russia more than doubled its key interest rate, to 20% from 9.5% in reaction to a currency move that saw the ruble tumble nearly 16% against the U.S. dollar.

Over the weekend, the U.S. joined allies in Europe and Canada in moving to bar key Russian banks from the interbank messaging system, SWIFT. The system connects more than 11,000 banks and financial institutions in more than 200 countries and territories.

Russian President Vladimir Putin put his country’s nuclear deterrence forces on high alert Sunday amid a growing global backlash against the invasion. Ukraine’s Defense Ministry said representatives for Ukraine and Russia have agreed to meet on the Ukraine-Belarus border “with no preconditions.”

Government bond yields were sharply lower across the curve, with the benchmark 10-year Treasury note most recently at 1.916%, off 6.8 basis points on the session. A basis point is 0.01%; yields move opposite prices and were lower amid high demand for save-haven bonds.

U.S. West Texas Intermediate (WTI) crude future rose more than 5% to around $96.30 per barrel on Monday. The April Brent crude futures contract also rose nearly 5% to $102.75 per barrel, while natural gas futures were up 4% to $2.84.

Portfolio:

We enter the new trading week holding positions in EQNR, VTRS, NOV, and ITRM.  We will be looking to add as the queue continues to ignite.  This market continues to set up for an even greater move.  Be on alert today and let's have a great session!