Stocks Closed Lower, Oil Spikes Higher  Image: Bigstock Stocks closed lower again yesterday, but off their lows. The market remains gripped by the war on Ukraine. The international community continues to sanction Russia. And more and more private sector businesses are refusing to even do business with Russia. Apple, for example, has paused product sales in Russia, Shell and BP are exiting their billion dollar partnerships with Russia's energy companies Gazprom and Rosneft, and General Motors will suspend all vehicle exports to Russia, to name a few. The news of Ukraine's heroic resistance to Russia's invasion has been inspirational. But many fear what else Russia will do as a result. But it's heartening to see the world unite in support of Ukraine and against Putin. The International Energy Agency announced that the U.S. and its allies will release 60 million barrels of oil from its emergency reserves. The U.S. will account for half of that by tapping 30 million barrels from the Strategic Petroleum Reserves. For perspective, the U.S. uses approximately 18 million barrels per day, and imports roughly 7 million barrels per day. So 30 million barrels is not a huge amount. But more supply should help bring down prices or at least help slow their advance. But the oil market appeared unimpressed with the move as it soared more than $10 or 11% yesterday, topping $106. In other news, yesterday's Redbook reports showed same store retail sales up 13.4% y/y. That's down a bit from last week's pace of 14.5%, but is still an impressive showing. The PMI Manufacturing Index came in at 57.3, which was just under the consensus for 57.5, but above last month's 55.3. The ISM Manufacturing Index came in at 58.6, which was above last month's 57.6, and views for 58.0. And Construction Spending rose 1.3%, beating last month's upwardly revised 0.8%, and estimates for -0.2%. On a y/y basis, spending is up 8.2%. President Biden gave his State of the Union speech yesterday night. Before he spoke, S&P futures were up 0.15%. Afterwards, they were slightly higher with the S&P up 0.20%. Today, OPEC will meet. And the market will be watching if any new developments come out of that meeting. We'll also get the Motor Vehicle Sales report, MBA Mortgage Applications, the ADP Employment Report, the Survey of Business Uncertainty, and the Beige Book report. And we'll hear from Fed Chairman, Jerome Powell, as he gives day one of his semiannual testimony on monetary policy to the U.S. House of Representatives. Day two is tomorrow in front of the Senate. People will be following his comments closely. In the meantime, the world continues to watch what happens in Ukraine, and is hoping for the best. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
Post a Comment
Post a Comment