Good Evening. Here is everything you need to know about today’s recap on the in’s and out’s of the major market and economic events.
As investors continue to examine the Federal Reserve’s monetary policy path forward, stocks climbed amid a turbulent session at the start of another busy week for corporate earnings and fresh economic data.
Today, the S&P 500 was down by 0.37% to 4,483.87, while the Dow barely finished in the green by 0.004%. The Nasdaq was down by 0.58% to 14,015.67 points.
Let’s start the week with a trip to the Russia–Ukraine border, where Russia has accumulated at least 70% of the military capability required to invade its neighbor, according to the US administration. That implies a move into Ukraine “may happen as soon as tomorrow or it could take several weeks yet,” as National Security Adviser Jake Sullivan put it yesterday.
It might potentially deplete Europe’s energy supply. The potential that Russia could shut off the energy supply to Europe is one of the scenarios keeping world leaders awake at night.
What would happen if Russia invaded: The US has threatened to impose “the mother of all sanctions” on the country if it invades its neighbor. Russia could respond by limiting gas exports to Europe as a form of retaliation. Which…wouldn’t be a good thing, given Europe’s coffee-level dependence on Russian energy.
- Russia provides around 33% of Europe’s natural gas and over 25% of its crude oil imports.
- In one extreme case, Germany imports more than half of its natural gas from Russia.
The fact that European consumers are already being squeezed by record energy prices makes Europe considerably more susceptible to Russian energy-based retaliation. An energy regulator has warned that 22 million homes in the United Kingdom will see their gas and electricity bills rise by 54% in April.
Looking forward… Today, two distinct high-stakes talks centered on the Ukraine war will take place. Chancellor Olaf Scholz of Germany is meeting with Vice President Joe Biden in Washington, DC, and French President Emmanuel Macron will meet with Russian President Vladimir Putin in Moscow. Macron stated that he believes a war can be avoided.
Peloton (PTON) shares jumped over 30% immediately after the market opened Monday morning and 21% after closing, following news that the exercise technology business had sparked takeover interest from several major corporations.
According to reports published Friday by the Financial Times and the Wall Street Journal, both Nike and Amazon are considering buying Peloton. Peloton’s stock has dropped 83% in the last 52 weeks as the firm indicated that demand for its linked at-home stationary cycle and treadmill products was beginning to decline. Peloton was also recently chastised by activist investment firm Blackwells Capitals, which advocated for the removal of CEO John Foley after the stock’s decline.
Nonetheless, any purchase must win the approval of Peloton CEO John Foley, who wields a stronghold on the board’s voting authority. To sell the company he co-founded in 2012, he’d have to be in a very despondent mood.
THE WEEK AHEAD
Inflation: On Thursday, the dreaded monthly inflation report will be released, and it’s predicted to be yet another disaster. Consumer prices are expected to have risen 0.5 percent in the previous month and 7.3 percent in the previous year, the largest increase since 1982.
Earnings: Last week’s earnings releases resulted in significant price swings, ranging from a 59% rise for Snap to a 26% loss for Meta. Pfizer, Disney, Coca-Cola, Pepsi, Twitter, and Zillow, among the firms reporting this week, are well aware that any blemish on their financials might result in a stock drop in this market.