The hot PPI number didn’t dissuade the bulls from holding the morning gap, feeling the relief of the Russian troop pullback.  But, unfortunately, according to NATO, the news of a withdrawal was nothing more than a ruse.  Yesterday’s relief rally was nice, but the overhead price resistance levels remain, as does the overall downtrend in the indexes.  Expect price action to remain challenging with a hectic day of economic and earnings data coming our way.  So plan your risk carefully with the vast uncertainty ahead.

While we slept, Asian markets rebounded, led by the Nikkei up 2.22% even as China’s inflation came in hotter than expected.  However, with Russia-Ukraine tensions rising, European markets traded mixed and cautious.  With critical economic data and earnings reports before the bell, U.S. futures point to flat open when writing this report.  However, traders should prepare for just about anything at the open.

Economic Calendar

Earnings Calendar

We have a busy Wednesday with about 170 companies listed on the earnings calendar.  Notable reports include SHOP, ALB, ALKS, ATUS, AMCK, CRMT, AIG, AWK, ADI, AMAT, GOLD, SAM, CAKE, CSCO, CDE, COWN, CROX, DASH, ET, EQIX, FSLY, FSR, GRMN, GRNC, HLT, HST, H, INFN, KHC, MGY, MRO, MMLP, NE, NUS, NTR, NVDA, OC, PXD, R, SBLK, SUN, SNPS, TTD, TRIP, VECO, VMC, & WING.

News & Technicals’

NATO has accused Russia of increasing its troop count at the Ukrainian border a day after Moscow claimed it had begun withdrawing some of its military units.  NATO chief Jens Stoltenberg said Wednesday, “it appears that Russia continues their military buildup” at the border.  U.K. Prime Minister Boris Johnson said Wednesday that the Kremlin is sending the West “mixed signals.”  Many energy analysts say that Brent surpassing $100 a barrel is almost a given at this point.  An increasing number of forecasters predict the commodity surpassing $125 a barrel and even higher.   Money is pouring into investments in oil-related stocks, and international oil companies are raking in record profits.  The Energy Information Administration lowered its OPEC capacity estimates by 300,000 barrels per day in February.  The role of PR companies in preventing climate action has typically been overlooked, in large part because communications firms have sought to remain in keeping with the PR adage that “the best PR is invisible PR.”  However, comprehensive academic research quantifying the PR industry’s role in climate politics has been followed by pressure from external campaign groups, scientists, and environmental activists.  Now, the prospect of U.S. congressional hearings is likely to turn up the heat even further.  Airbnb beat Wall Street estimates on earnings and revenue in its fourth quarter.  The company reported 73.4 million nights and experiences booked in the fourth quarter, down nearly 8% from the prior quarter and missing estimates.  Airbnb expects its first-quarter 2022 nights and experiences booked to exceed Q1 2019 levels significantly.  Treasury Yields trade mixed in early Wednesday trading with the 10-year trading at 2.0469% and the 30-year declining slightly to t2.3550%.

Although it looks as if the Russian pullback of troops was misinformation and a hot PPI number continued to show rising inflation, the bulls were able to matain the gap throughout the day.  Today will turn our attention to Retail Sales figures, Import-Export Prices, Industrial  Production, Petroleum Statis and the FOMC minutes.  We also have a big day of earnings to keep the volatility high and traders guessing with AMAT, CSCO, and NVDA reporting after the bell.  Although the relief rally was nice little, if anything changed in the technical picture of the indexes with significant overhead price resistance and downtrends holding.  I suspect there will be a lot of eyes on the Retail numbers this morning with consumer sentiment at such low levels.  Again, prepare for volatile price action and respect price resistance with the downtrend market conditions.

Trade Wisely,

Doug