Trending Assets
Top investors this month
Trending Assets
Top investors this month
Russia-Ukraine Continues to Drive Markets: Daily Contrarian, Feb. 18
Good morning contrarians! Yesterday saw a pretty significant sell-off as fears over Russia-Ukraine took center stage. The Nasdaq gave up almost 3% and Dow Industrials had their worst day of the year so far. Cryptos dropped and bonds rallied. But oil and gas curiously did not. More on that in the bottom line.

Post media


The latest developments here are that Secretary of State Antony Blinken proposed a meeting with his Russian counterpart next week. President Biden has a call with other NATO leaders this afternoon and Vice President Kamala Harris and House Speaker Nancy Pelosi are in Munich for a security conference. Figure they could have maybe chosen a better city for that? Well, whatever…

State of Play
Stock futures have bounced off the lows and are heading higher this morning. Presumably the Blinken news overnight was the cause for the shift. As of 0635, the Nasdaq is up 0.7%, with Dow Industrials up 0.5% and S&P 500 0.3%.

Bonds have stopped their advance in keeping with this risk-on theme, with the yield o the 2-year up a bit to 1.49% and the 10-year at 1.98%.

Commodities are selling off pretty precipitously, with WTI crude down 2.5% to below $90/barrel and natural gas off 1.2% to $4.40. But industrial metals are continuing to advance: Zinc, nickel, and aluminium all up 1% or more. Copper is up a little less.

Gold and silver are dropping a bit, with gold about 0.6% lower to drop below $1900/oz. Cryptos are being sold more significantly, with bitcoin down 6% to around $40,400.

Earnings
Earnings seasons is winding down but there are a few big companies still left to report. DraftKings ($DKNG) is up this morning at 0700. Deere ($DE) and Campbell Soup ($CPB) are also expected.

Economic Data
Existing home sales are out at 1000. These are expected to have decrease by 1% month-over-month in January, to 6.1 million from 6.8 million. Building permits and housing starts (which are more of a leading indicator than existing home sales) were mixed yesterday, with permits beating expectations and housing starts falling short.

We also have a bunch of Fed speakers again today: Chicago Fed President Charles Evans, New York Fed President John Williams, and Fed Governors Lael Brainard and Christopher Waller.

The Bottom Line
It’s all still about Russia-Ukraine. As pointed out yesterday, the movement in asset prices is not entirely consistent here. For example, if fears of an invasion were really pronounced, you could expect oil and especially natural gas (seeing how it’s Russia) to spike. But they actually dropped yesterday and are continuing their descent this morning. Also Russian indexes and ADRs still remain above their lows from a couple of weeks ago.

So either investors aren’t taking the invasion threat entirely seriously, or they’re just using the excuse to dump certain stocks (cough, tech). Doesn’t mean they’re right on either count of course.

For contrarians who still believe in a growing economy, this has created an opportunity to put money to work. Through one does have to be concerned about the levels where certain tech stocks are trading: most are well into correction territory if not an outright bear market.

Either way, do your own research. Make your own decisions. And have a nice weekend.

Special Notice
Today’s briefing provided in its entirety for the benefit of the CommonStock community!

Become a subscriber to listen to the podcast, get these briefings in your inbox each morning and take advantage of a host of other benefits. As a CommonStock member you get a discount too. Just click this link:

HTTPS://ContrarianPod.substack.com/CommonStock
WSJ
Blinken Sees Moment of Peril in Ukraine, Challenges Russia to Commit That It Won’t Invade
Secretary of State Antony Blinken warned of a looming Russian offensive against Ukraine and proposed a last-ditch diplomatic meeting with his Russian counterpart next week that could lead to a potential summit of key leaders.

Related
Already have an account?