Coffee With Greta: Oil Hits 7-Year High on Ukraine Crisis
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DJIA Futures: -174 (-0.5%)
SPX Futures: -20 (-0.5%)
NASDAQ Futures: -63 (-0.4%)
Good morning friends!
Futures are lower as the market gears up for a new month of trade and all eyes remain on Russia’s attack on Ukraine.
Let’s get right to it!
Oil Prices Hit 7-Year High
U.S. crude prices surged to the highest level since July 2014 amid supply concerns as Russia continues its attack on Ukraine.
West Texas Intermediate crude futures jumped 5.7% to $101.17 per barrel.
At the same time, Brent crude futures rose 6.3% to $104.16 per barrel.
Canada became the first country to ban Russian oil imports Monday.
The International Energy Agency is meeting today to discuss “the impact of Russia’s invasion of Ukraine on oil supply and how IEA members can play a role in stabilizing energy markets.”
Morgan Stanley hiked its oil price forecasts, expecting Brent to average $110 bbl in Q2.
Russia Bears Down on Ukraine Capital
Russia is continuing its assault on Ukraine with a massive convoy approaching the capital city of Kyiv.
Satellite images showed a 40 mile long convoy of Russian military vehicles approaching the city Monday.
Ukrainian and Russian officials held talks in Belarus Monday which ended with no resolution.
The ruble is down again today after recovering some losses Monday.
The exchange rate is over 102 ruble to $1 USD.
The Russian Central Bank kept the Moscow Stock Exchange closed again today.
Russia-linked ETFs in the U.S. are continuing to plummet today.
The VanEck Russia ETF (RSX) is down 15.8% ahead of the open, with the iShares MSCI Russia ETF (ERUS) falling 11.2%.
Russians Rush to Crypto
Russians flooded the crypto market Monday as the ruble collapsed in response to new sanctions.
Trading volume between the ruble and Bitcoin jumped to a nine-month high, pushing BTC’s value above $41,000.
The global crypto market cap is up 12.3% over the past 24 hours to $2.04 trillion.
Bitcoin is up 17% at $44,600 with Ethereum rising 13% to $2,900.
Crypto exchange Binance confirmed Monday it is blocking the accounts of any Russians targeted by sanctions.
Binance said it will not freeze the accounts of other Russian users.
Target Rallies on Earnings
Target (TGT) shares are surging 12.5% ahead of the open after reporting strong fiscal Q4 earnings.
The retailer reported adjusted earnings of $3.19 per share on $31 billion in revenue.
Analysts had forecast adjusted EPS of $2.86 on $31.39 billion in revenue.
Overall sales were up 9% year-over-year last quarter.
Target’s online services expanded 45% in the full-year, after surging 235% the prior year.
The company forecast revenue growth in the low to mid single-digits this year and earnings growth in the high single-digits.
Domino’s Slides on Weak Q4 Results
Domino’s Pizza (DPZ) shares are sliding 6% in premarket trade after missing Q4 expectations
The pizza chain reported earnings of $4.25 per share on $1.34 billion in revenue.
That was short of analysts’ expectations for EPS of $4.28 on $1.38 billion in revenue.
Domino’s also announced CEO Ritch Allison will retire.
He will be succeeded by COO Russell Weiner.
Zoom Warns of Growth Slowdown
Zoom (ZM) shares are down 2.2% ahead of the open after the company’s 2022 revenue forecast disappointed.
Zoom reported adjusted Q4 earnings of $1.29 per share on $1.07 billion in revenue after the market closed Monday.
That beat analysts’ expectations for adjusted EPS of $1.06 on $1.05 billion in revenue.
But traders sold off the stock as revenue growth continues to slow.
Zoom’s Q4 revenue was up 21% year-over-year, a slowdown from 35% in Q3.
The company forecast Q1 revenue between $1.07 billion and $1.075 billion, which would represent growth of just 12%.
For the full year, Zoom expects revenue of $4.53 billion to $4.55 billion, lower than analysts’ expectations for $4.71 billion.
Zoom is the 4th largest holding in Cathie Wood’s Ark Innovation ETF (ARKK) which is down 0.4% in premarket trade.
Lucid Slashes Production Forecast
Lucid Group (LCID) shares are tumbling 12.2% ahead of the open after the electric automaker slashed its 2022 production forecast.
The company now expects to produce between 12,000 and 14,000 vehicles this year, down from 20,000 previously.
The company cited supply chain constraints for the cut.
CEO Peter Rawlinson said, “This reflects the extraordinary supply chain and logistics challenges we’ve encountered and our unrelenting focus on delivering the highest-quality products.”
Lucid said it has received over 25,000 customer reservations for its vehicles.
In Case You Missed It
- Tesla (TSLA) shares rallied 7.5% Monday as the company’s new factory in Germany appears close to opening. German newspaper Tagesspiegel reported Tesla is expected to receive its final environmental approvals by the end of this week. That is the last hurdle before Tesla can start producing Model Y’s at Gigafactory Berlin. Tesla is said to be planning a grand opening ceremony in the third week of March.
- A shipment of SpaceX Starlink satellite internet dishes arrived in Ukraine Monday. Ukraine’s digital minister confirmed the deliveries in a tweet, thanking Elon Musk. Musk responded saying “you are most welcome”. SpaceX sent the satellites to Ukraine following a request over the weekend, to alleviate the impact of suspected Russian cyber attacks on the country.