Brent crude briefly topped $130 a barrel Sunday night as oil prices surged, with the U.S. considering a total embargo on Russian oil products.  With gas prices up 65% in this year alone, worries of recession and stagflation worry investors not only in the U.S. but worldwide.  Thursday’s CPI report will be of particular interest with the sharp rise in all commodity prices this year.  However, today we have a light day of earnings of economic data, so plan for extra sensitivity to the news cycle and the rapidly rising price impacts to the consumer.

During the night, Asian markets traded sharply lower, with the Hong Kong leaning the way down 3.87% at the close.  This morning, European markets are also under pressure, seeing red across the board.  With a light day or earnings and economic data, U.S. futures point to a substantial gap down at the open in reaction to pain rise in energy prices.

Economic Calendar

Earnings Calendar

We begin the new week with a lighter day on the earnings calendar with 70 companies listed.  Notable reports include CIEN, CLAR, EGRX, IPI, ROVR, SQSP, TDUP, & VET. 

News & Technical’s

“The China-Russia relationship is valued for its independence,” Chinese Foreign Minister Wang Yi said.  Wang portrayed the bilateral relationship as separate from China’s relations with other countries or regions.  He added that the Red Cross Society of China would provide Ukraine with emergency supplies “as soon as possible.”  Economist Stephen Roach warns that the effects of any default on Russia’s sovereign debt as a result of the Ukraine crisis would spill over to emerging markets.   And China would not be unscathed, and he told CNBC’s “Squawk Box Asia.”  The U.S. has sanctioned Russia’s sovereign debt while major rating agencies slashed Russia’s sovereign rating to “junk” status.  In addition, Carl Icahn has sold the last of what was once a 10% stake in energy company Occidental Petroleum, The Wall Street Journal reported.  The sale ended an uneasy relationship between the billionaire activist investor and the oil-and-gas producer just as the latter’s shares surged.  The Journal reported that Icahn has realized a profit of some $1 billion on the Occidental investment, citing sources “familiar with the matter.”  U.S. Secretary of State Antony Blinken told NBC on Sunday that Washington is in “very active discussions” with European governments about banning imports of Russian crude.  Russia has continued to ramp up its assault on neighboring Ukraine in recent days, with forces attempting to advance and isolate the capital city of Kyiv and other major cities while being met with fierce Ukrainian resistance.  Treasury yields fell slightly in early Monday trading, with the 10-year declining to 1.7171% and the 30-year slipping to 2.1407%.

Oil prices surged over the weekend, hitting $130 a barrel, up 65% just this year, threatening recession in many countries worldwide.  The oil prices hit a 13-year high as the United States considers a total embargo of Russian oil products.  Some analysts project brent crude could reach 200 a barrel if the trend continues massively complicating the already soaring inflation.  Inflation will be front and center Thursday morning, with the CPI report before the bell.  However, we have a lighter day of earnings and economic data to kick off the new trading week.  Look for the markets to be susceptible to the Ukrainian invasion news cycle and oil prices as investors search for direction amidst the massive uncertainty.  We can no longer rule out a retest of February lows, and the huge point intraday whipsaws are likely to continue in the week ahead. 

Trade Wisely,

Doug