Morning Markets
March S&P 500 futures this morning are down by -0.65%. U.S. and European stocks are under pressure today as the conflict in Ukraine intensified and raises concern that Russia’s invasion of Ukraine will weigh on global economic growth. Hopes of an early negotiated settlement were dashed after Russia vowed to continue to attack until its goals were met. The escalation of the Ukraine conflict has also raised the specter of a major global oil supply disruption and pushed WTI crude today up more than +4% to a new 7-1/2 year high. The plunge in stocks has boosted T-note's safe-haven demand as the 10-year T-note yield dropped to a 5-week low today of 1.712%.
Russia kept its stock market closed for a second day today, and there’s a growing risk that Russia’s stocks and bonds could be kicked out of major investment benchmarks as they become increasingly harder to trade. The off-shore ruble is trading near 105.50 rubles per dollar, modestly below Monday’s record of 117.33 rubles per dollar.
The Euro Stoxx 50 index today is down sharply by -2.93%. European stocks today extended Monday’s decline, and the Euro Stoxx 50 is just above last Thursday’s 11-1/2 month low. Signs of escalation of the Russian invasion of Ukraine are weighing on European stocks with a massive 40-mile long line of Russian armor approaching Ukraine’s capital of Kyiv. Weakness in airline and hospitality stocks are leading losers today in European stocks.
Today’s European economic data was bearish for stocks. German Feb CPI (EU harmonized) rose +0.9% m/m and +5.5% y/y, stronger than expectations of +0.8% m/m and +5.4% y/y. Also, the Eurozone Feb Markit manufacturing PMI was revised downward by -0.2 to 58.2 from the previously reported 58.4.
ECB Governing Council member Kazaks said today that "inflation will most likely remain higher than initially thought and of course these restrictions and higher prices will decrease economic growth."
Asian markets today climbed to 1-week highs and closed higher. China’s Shanghai Composite closed up +0.77%, and Japan’s Nikkei Stock Index closed up +1.20%. Unexpected strength in Chinese manufacturing activity gave Asian markets a lift today after the China Feb manufacturing PMI unexpectedly rose +0.1 to 50.2, stronger than expectations of a decline to 49.8. Japanese stocks also rose today on optimism that the impact of Russia’s invasion of Ukraine will force the Fed to raise interest rates at a slower pace than previously expected.
Pre-Market U.S. Stock Movers
Lucid Group (LCID) tumbled -15% in pre-market trading after it cut its 2022 production estimate of 12,000-14,000 vehicles from a prior estimate of 20,000, citing “extraordinary supply chain and logistics.” Other electric vehicle makers also declined, with Rivian Automotive (RIVN), Lordstown Motors (RIDE), and NIO (NIO) down more than -3%, and Tesla (TSLA) down more than -1%.
Zoom Video Communications (ZM) is down more than -4% after it forecast Q1 revenue of $1.07 billion-$1.08 billion, below the consensus of $1.10 billion.
Novavax (NVAX) dropped more than -7% in pre-market trading after it reported a Q4 loss per share of -$11.18, wider than the consensus of -$4.33.
GoodRx Holdings (GDRX) plunged more than -30% in pre-market trading after it forecast Q1 revenue of about $200 million, well below the consensus of $228.5 million.
Groupon (GRPN) tumbled more than -12% in pre-market trading after it reported Q4 adjusted EPS of 18 cents, weaker than the consensus of 23 cents, and forecast full-year adjusted Ebitda of at least $112 million, Below the consensus of $172.2 million.
Vroom (VRM) dropped more than -6% in pre-market trading after it forecast Q1 revenue of $875 million, well below the consensus of $1.03 billion.
Energy stocks and energy service providers are climbing in pre-market trading with the price of WTI crude up more than +4% at a new 7-1/2 year high. Devon Energy (DVN), Marathon Oil (MRO), Haliburton (HAL), Diamondback Energy (FANG), Occidental Petroleum (OXY), and Exxon Mobil (XOM) are all up more than +2%.
Defense stocks are moving higher in pre-market trading as they added to Monday’s gains when Germany said it would boost its military spending. Raytheon Technologies (RTX), L3Harris (LHX), Northrop Grumman (NOC), and Lockheed Martin (LMT) are up more than +1%
Today’s U.S. Earnings Reports (3/1/2022)
AutoZone Inc (AZO), Domino's Pizza Inc (DPZ), Hewlett Packard Enterprise Co (HPE), Hormel Foods Corp (HRL), J M Smucker Co/The (SJM), Ross Stores Inc (ROST), salesforce.com Inc (CRM), Target Corp (TGT).
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