Daily Markets: Commodities, Cryptos Making Moves, Influencing Stocks

Today’s Big Picture

Asian markets closed today’s trading mixed as Japan’s Nikkei declined 0.30%, Hong Kong’s Hang Seng and China’s Shanghai Composite closed down 0.67% and 1.13% while Taiwan’s TAIEX advanced 1.13% and India’s Sensex gained 2.29%. South Korea’s markets are closed today as the country holds it presidential election. By mid-day trading, European equity indices are up across the board and U.S. futures point to a strong market open later this morning. Cryptocurrencies are also higher today after President Joe Biden announced his highly anticipated executive order on digital assets.

With another relatively quiet day on the economic and earnings front, the market will continue to focus on the ongoing Russia-Ukraine war and its implications. This morning, the UK government announced a new suite of aviation sanctions enabling new powers to detain any Russian aircraft in the UK. Among the new powers, the government will be able to remove aircraft belonging to designated Russian individuals and entities from the UK aircraft register. Included among those measures is the ban on UK exports of aviation or space-related items and technology to Russia. Also, this morning, Fitch downgraded Russia to 'C' from 'B' rating, which reflects Fitch's view that a sovereign default is imminent.

Despite President Biden’s announced U.S. ban on Russian oil imports, and amid reports Russia will ban commodity exports in response to recent sanctions, oil prices are trading off today, helping give equities some lift. Per data from the Energy Information Administration, roughly 8% of American imports of oil and refined products came from Russia last year. Meanwhile the national average for a gallon of gas hit $4.25 per gallon, up from $3.65 just a week ago. With Reuters reporting Beijing has told Chinese state refiners to consider suspending exports of gasoline and diesel in April as the Ukraine war sparks supply concerns, we may not be out of the oil woods just yet.

Data Download

International Economy

Another light day in international economic releases as Italy announced January YoY Industrial Production growing a scant 0.43% disappointing on the 3.2% estimate and the previous reported growth of 8.1%.

While everyone is focused on oil prices, another commodity that has seen major price upheaval is iron, as well as coking coal, which is used to make steel. Coking coal contracts saw $627.50 today which represents a 40% gain since the beginning of March. This points to a significant global inflationary shock. Iron futures contracts saw $160 yesterday, off November lows of $93. Iron has seen higher prices than this in 2021 but traders saw those as demand based as opposed to the supply disruptions caused by the invasion by and subsequent sanctioning of Russia.

Additionally, Goldman Sachs (GS) shared it sees global grain prices rising further in what it calls the “sharpest shock” since the 1970s.

Domestic Economy

Ahead of tomorrow’s employment reporting the January JOLTS Job Openings report will be released at 10:00 AM ET with expectations of 10.9 million, about 25,000 lower than the previous month. This is a sign that we have a robust employment picture but also points to another potential inflationary scenario as employers continue to have difficulty attracting workers.

Markets

As oil prices flirted with $130 per barrel yesterday, equities had another tough day with the S&P 500 ultimately closing 0.7% lower. While energy and consumer discretionary stocks closed the day higher, the other 9 S&P 500 sectors finished the day down led by the 2.6% drop in consumer staples and the 2.1% fall in healthcare. The Nasdaq Composite shed just 0.3% yesterday, while the Dow Jones Industrial Average lost 0.6%) and the small-cap heavy Russell 2000 gained 0.6%.

Stocks to Watch

Before trading kicks off for U.S.-listed equities, Campbell Soup (CPB), Ebix (EBIX), Korn Ferry (KFY), Oatly Group (OTLY), The Children’s Place (PLCE), Thor Industries (THO), United Natural Foods (UNFI), and Vera Bradley (VRA) will report their latest quarterly results.

Asked at a Morgan Stanley conference about Disney's (DIS) move to develop a cheaper ad-supported version of Disney+, Netflix's (NFLX) Chief Financial Officer Spencer Neumann said while it's not in the company's plans, that could change if "we determine something that we have the right to kind of play within the space and it meets those dimensions."

DHL Express placed an order for six additional Boeing (BA) 777 Freighters. The purchase takes DHL Express' order book total to 28 777 Freighters since 2018.

After a thorough examination of strategic alternatives, XPO Logistics (XPO) announced its intention to separate its tech-enabled brokered transportation services from its less-than-truckload (LTL) business in North America and intends to divest its European business and North American intermodal operation. The planned spin-off transaction is intended to be tax-free to XPO shareholders and would create two focused, publicly traded companies.

Leveraging its portfolio of intelligent enterprise robotic solutions, Berkshire Grey (BGRY) and consulting firm Tessiant announced they will collaborate to help transform supply chain operations through intelligent robotic automation of eCommerce fulfillment, store replenishment, package handling and logistics.

And the list of companies halting business in or with Russia continues to grow with PayPal (PYPL), Starbucks (SBUX), PepsiCo (PEP), Coca-Cola (KO), Yum! Brands (YUM), and McDonald’s (MCD) among the latest additions.

IPOs

There are no IPO offerings expected to price this week. Readers looking to dig more into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page.

After Today’s Market Close

Asana (ASAN), Calavo Growers (CVGW), Couchbase (BASE), and CrowdStrike (CRWD) will be among those companies reporting their latest quarterly results. Those looking for more on which companies are reporting when, head on over to Nasdaq’s Earnings Calendar.

On the Horizon

Wednesday, March 9

• Japan: 4Q 2021 GDP
• China: CPI and PPI - February
• US: Weekly MBA Mortgage Applications
• US: JOLTS Job Opening Report – January
• US: Weekly EIA Crude Oil Inventories

Thursday, March 10

• European Central Bank Rate Decision
• US: Weekly Initial & Continuing Jobless Claims
• US: Consumer Price Index – February
• US: Hourly Earnings – February
• US: Weekly EIA Natural Gas Inventories

Friday, March 11

• Japan: Real Household Consumption Expenditures - January
• Germany: CPI – February
• UK: Industrial and Manufacturing Production - January
• US: Michigan Sentiment Index (Preliminary) – March

Thought for the Day

"It is better to change an opinion than persist in a wrong one.” ~Socrates

Disclosures

• CrowdStrike (CRWD) is a constituent of the Foxberry Tematica Research Cybersecurity & Data Privacy Index
• Calavo Growers (CVGW) is a constituent of the Foxberry Tematica Research Sustainable Future of Food Index
• Calavo Growers (CVGW), Oatly Group (OTLY) are constituents of the Tematica BITA Cleaner Living Index
• Calavo Growers (CVGW), Oatly Group (OTLY) are constituents of the Tematica BITA Cleaner Living Sustainability Screened Index
• PayPal (PYPL) is a constituent of the Tematica BITA Digital Payments & Fintech Sustainability Screened Index
• Coca-Cola (KO), McDonald’s (MCD), PepsiCo (PEP), Starbucks (SBUX) are constituents of the Tematica Research Thematic Dividend All-Stars Index

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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