Good morning contrarians!
Stocks futures are slipping a day after declines, amid reports of intensified fighting in Ukraine. As of 0635, major European indexes are down 3% while U.S. indexes off a little less than 1%. Commodities are continuing to be bid up, with WTI crude up 2% to trade around $110/barrel. Wheat prices are up another 10%, followed by nickel (+9%), aluminium and palladium (+5%). These are the commodities most affected by Russia-Ukraine.
Bonds are seeing bids, with the yield on the 2-year back down to 1.5% and the 10-year down to 1.78%. Cryptos are dropping, with bitcoin down 4% to $41,600.
Russia-Ukraine
Russia-Ukraine concerns are back at the forefront after reports that Russian troops had attacked and now seized a nuclear power plant in Zaporizhzhia. There was apparently a fire at the plant, which is Europe’s largest. The fire was brought under control, but from all accounts the situation in Ukraine is continuing to deteriorate.
At least the two sides are talking, though progress is fleeting. They did agree to establish a ‘humanitarian corridor’ to allow for evacuation of civilians. One can only hope for a peaceful resolution soon and an end to this misery. The whole situation is pretty depressing and the human toll is already horrific.
But the narrative is starting to emerge that Russia and Ukraine make up a pretty small part of the global economy, and that for all the awful humanitarian costs of this conflict, the economic damage will be limited — as long as the fighting remains contained between the two countries (and presumably Belarus, which has probably always been involved in some capacity).
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