Although the inflation rate hit 7.9% and the prices at the pump continued to rise, the bulls decided the conditions were right to buy in another light volume day.  But, as Russian forces advance on the Ukrainian capital city, the question is, can the bulls follow through another day with the uncertainty of the weekend?  In addition, with a light day of earnings, the Consumer Sentiment report could be market-moving if it reflects the impacts of rising prices and the likely constriction of consumer activity.  Expect choppy conditions to continue and plan carefully with the FOMC decision next week.

Asian markets traded mixed but mostly lower overnight, with the Nikkei declining 2.05%.  However, despite the advancing Russian invasion, European markets are in rally mode this morning, seeing nothing but green across the board.  U.S. futures point to a considerable gap as they try to shake off inflation impacts on the economy.  Watch for those whipsaws and the dreaded pop and drop as we test price resistance levels with the uncertainty of the weekend pending.

Economic Calendar

Earnings Calendar

We have a light day to wrap up the earnings reports for this week.  The calendar lists 57 companies, but most of those are not confirmed.  Notable reports include BKE, FUTU, GENI, PLXP, RGF, & SPNE.

News & Technicals’

Satellite images show that Russian armored units have fanned out through the towns close to Antonov airport.  Artillery howitzers are thought to be situated in firing positions nearby.  The latest images come as Russia’s onslaught of Ukraine enters its 16th day, invading troops seeking to maintain pressure on Kyiv and Mariupol.  Supply-side risks arising from the war have stoked extreme volatility across global commodity markets, with oil, nickel, and wheat also surging alongside natural gas in recent weeks.  Natural gas is once again front and center after Russian Deputy Prime Minister Alexander Novak warned that Moscow could halt its exports to Germany via the Nord Stream 1 pipeline.  The Senate passed a bill to fund the government through September, preventing a shutdown.  The legislation also includes $13.6 billion for humanitarian and military assistance for Ukraine as it fights off a Russian invasion.  However, lawmakers scrapped $15.6 billion in supplemental coronavirus relief from the plan.  Rivian missed Wall Street’s fourth-quarter earnings expectations and forecast a modest increase in vehicle production for 2022.  Rivian said it expects to produce 25,000 vehicles this year, as the electric vehicle start-up battles through supply chain constraints and internal production snags.  T said reservations for its vehicles had reached about 83,000 as of March 8, up from 71,000 in December.  Treasury Secretary Janet Yellen said Thursday that Americans would likely see another year of “very uncomfortably high” inflation.  “We have seen a significant increase in gas prices, and I guess that next month, we’ll see further evidence of an impact on U.S. inflation of Putin’s war on Ukraine,” Yellen said.  The Treasury secretary’s comments came just hours after the Labor Department said consumer prices rose 7.9% in February, the fastest pace since 1982.  Treasury yields pulled back slightly in early Friday trading, with the 10-year slipping to 1.9864% and the 30-year dipping to 2.3641%.

After learning that the inflation rate hit 7.9%, the bulls decided that it was a reason to buy in another light volume day.  The question is, can they follow through another day as Russia closes in on the Ukrainian capital city and faces the uncertainty of the weekend.  As a result, prices at the pump inched higher once again at the national gas price at $4.33 a gallon, and diesel surged to $5.13, adding pressure to shippers and consumers alike.  We have a very light day on the earnings and economic calendar; however, the reading on Consumer Sentiment will be an important measure of the inflationary impacts.  Technically we have substantial price resistance above, and downtrends continue in all four indexes.  That said, we can’t rule out an attempt to test those resistance levels, but in the same breath, new lows are possible as the wild price gyrations continue.   As you plan forward, keep in mind the FOMC decision is forthcoming. 

Trade Wisely,

Doug