Coffee With Greta: Russia Slammed by Sanctions
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DJIA Futures: -463 (-1.4%)
SPX Futures: -67 (-1.5%)
NASDAQ Futures: -194 (-1.4%)
Good morning friends!
Futures are sharply lower as the market assesses the impact of the latest sanctions against Russia.
Let’s get right to it!
Russian Ruble Plunges
The Russian ruble plummeted 29% against the U.S. dollar today after new financial sanctions were imposed against Moscow over the weekend.
The ruble hit an all-time low of 119 per dollar but has since pared some of those losses and is now trading at 96 ruble per dollar.
Russia’s central bank hiked interest rates from 9.5% to 20% in response and shut down the Moscow Stock Exchange for the day.
The U.S. Treasury Department banned transactions with the Russian Central Bank this morning, effectively cutting off the bank from the U.S. dollar.
This comes after the U.S., Europe, and Canada imposed limits on the Russian Central Bank’s use of international reserves over the weekend.
Officials also removed key Russian banks from the SWIFT interbank messaging system.
Russian, Ukrainian Officials Meet
Russian and Ukrainian officials are meeting at the Ukraine-Belarus border today.
Ukrainian President Volodymyr Zelenskyy has said he does not believe there will be a breakthrough from that meeting.
Russia continued its attacks on Ukraine over the weekend, with a focus on the capital city of Kyiv.
But Ukrainian forces have so far maintained control of the country.
Ukraine’s interior ministry says dozens of civilians have been killed and hundreds have been wounded in the city of Kharkiv.
Russian President Vladimir Putin dramatically escalated tensions with the West Sunday, by putting his country’s nuclear deterrence forces on high alert.
Putin cited “aggressive statements” by NATO for that decision.
Oil Prices Surge
Oil prices are rallying again amid renewed uncertainty about how the Russia-Ukraine conflict will impact global supply.
West Texas Intermediate crude prices are up 4.6% at $95.74 per barrel.
Brent crude prices are up 3.1% at $101 per barrel.
Goldman Sachs analysts hiked their forecast for Brent crude prices today to $115 per barrel.
U.S. gas prices are expected to hit a new record high amid the surge in oil prices.
BP to Sell Stake in Russian Oil Producer
BP (BP) shares are down 8.2% ahead of the open after announcing its plan to sell its stake in Russia’s state-owned oil company.
BP has held a 19.75% stake in Rosneft since 2013.
BP’s CEO is also resigning from the Rosneft board effective immediately.’
Crypto Slips
Cryptocurrency prices slid over the weekend amid uncertainty surrounding the financial sanctions against Russia.
The global crypto market cap is down 4.4% in the past 24 hours, to $1.8 trillion.
Bitcoin is down 3.8% at $38,200 with Ethereum falling 6.6% to $2,600.
Trade Deficit Surges to New Record
The U.S. trade deficit surged 7.1% in January to a new record $107.6 billion.
That’s according to new data from the Commerce Department and is up from $100.5 billion in December.
Goods imports jumped 1.8% at the start of the year to a record high $262 billion.
Goods exports dropped 1.8% to $154.8 billion.
The trade deficit has soared as the U.S. economy opens faster than our global trading partners.
The Russia-Ukraine war is expected to make the supply chain issue worse.
In Case You Missed It
- The CDC relaxed its indoor masking recommendations for most Americans on Friday. The agency now recommends wearing a mask only in areas where risk is “high”. The CDC released a new color-coded map for Americans to determine the risk level of their community. About 63% of all U.S. counties are considered low or medium risk. The CDC is now putting heavier weight on hospitalizations and hospital capacity in determining community risk, rather than just case rate.