Dow sank 598 (not far from session lows), decliners over advancers better than 3-2 & NAZ dropped 218. The MLP index was steady in the 204s & the REIT index fell 1+ to the 449s. Junk bond funds were mixed & Treasuries soared again, bringing the 10 year yield down to 1.71%. Oil soared 8+ to the 104s & gold jumped 41 to 1942 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Russia appears to be advancing in its invasion of Ukraine with satellite imagery indicating that a huge convoy — some 40 miles long — of Russian military vehicles is heading toward Ukraine's capital of Kyiv. The convoy of Russian armored tanks & trucks that stretches from Pybirsk, further north of Kyiv, to the Antonov airport (also known as the Hostomel airport — the site of fighting last week between Russian & Ukrainian forces) on the northeast outskirts of the Ukrainian capital. In some parts of the convoy the vehicles are traveling 3 or 4 abreast on the road, although in other images the vehicles are seen further apart, in single file. UK Deputy Prime Minister Dominic Raab said today that Britain would do “everything is can to delay the fall of Kyiv.” The BBC reported that the convoy is 17 miles from Kyiv, although it's hard to gauge how quickly the military column could reach the city. The Pentagon has noted the Kremlin still wants its troops to capture Kyiv, despite the stiff Ukrainian resistance. “We have every indication that they still want to take Kyiv, that they are advancing on the ground and trying to get closer,” a senior Defense official said.
Huge Russian convoy approaches Kyiv as fears of all-out assault on the city grow
Mortgage rates are sinking as markets contend with the ramifications of Russia's attack on Ukraine & that means home prices are likely to continue surging. The average rate on the popular 30-year fixed mortgage had risen close to a full percentage point from the start of this year up until last Fri, when it hit 4.18%, according to Mortgage News Daily. It then fell to 3.9% today, the largest 2-day drop since Mar 2020, the start of the pandemic. This will give homebuyers more purchasing power as the historically busy spring season kicks off. It will also keep record high home prices continuing on their run higher. Prices in Jan were 19.1% higher year over year, according to a report from CoreLogic. That level of growth is the highest in 45 years, when CoreLogic began tracking prices. “In December and January, for-sale inventory continued to be the lowest we have seen in a generation,” said Frank Nothaft, chief economist at CoreLogic. “Buyers have continued to bid prices up for the limited supply on the market.” Nothaft added that the rise in mortgage rates since Jan eroded buyer affordability & that price growth should slow in the coming months, but that all depends on how long this drop in rates continues. It could be brief, given the other factors weighing on the mortgage market unrelated to the Ukraine crisis. Mortgage rates loosely follow the yield of the 10-year Treasury, which today fell to the lowest level since late Jan. Markets are experiencing volatility because of Russia's invasion of Ukraine.
Mortgage rates plunge just as home prices set another record
The price of wheat today rose to its highest levels in more than a decade, with traders concerned about global supply disruption as Russia's invasion of Ukraine advanced. A convoy of Russian military vehicles is approaching Ukraine’s capital of Kyiv, satellite imagery indicated. Wheat futures rose 5.35% to 984¢ per bushel, at its high today. That marks the highest price since 2008, when wheat traded as high as 985.5¢ per bushel. The grain traded “limit up,” which refers to the highest amount the price of a commodity is allowed to increase in a single day. Russia is the largest exporter of wheat & Ukraine is among the 4 biggest exporters of the commodity. Of the 207M ton intl wheat trade, 17% comes from Russia & 12% comes from Ukraine. Corn futures today also last traded up 5.07% at 725.75¢ per bushel, their highest level since May. Trading of corn futures was also halted.
Wheat prices soar to highest since 2008, trade ‘limit up’ on potential Russia supply hit
Ukrainian Pres Volodymyr Zelenskyy spoke to Pres Biden about efforts to curb Russian aggression, after his latest appeal to EU lawmakers to allow Ukraine to join the 27-member bloc. His outreach comes as fighting continues in several Ukrainian cities & a huge Russian convoy heads toward the capital, Kyiv. Ukraine's gov said a strike took out a TV tower in Kyiv. Meanwhile, Western diplomats & ambassadors walked out of a UN Human Rights Council meeting today when Russian Foreign Minister Sergey Lavrov's pre-recorded address began to play. A number of officials at the meeting condemned Russia's attack on Ukraine as a violation of international law. Pres Biden in a call with Ukraine Pres Volodymyr Zelenskyy reaffirmed US support for Ukraine & discussed the latest updates in Russia's invasion of the country, the White House said. Biden “underscored the United States’ sustained help for Ukraine, including ongoing deliveries of security assistance, economic support, and humanitarian aid,” according to the call which lasted 30 minutes. “The leaders discussed how the United States, along with Allies and partners, is working to hold Russia accountable, including by imposing sanctions that are already having an impact on the Russian economy,” the Biden administration said. “The leaders discussed Russia’s escalation of attacks on sites used by civilians in Ukraine, including today’s bombing near Babyn Yar Holocaust memorial,” the White House added. Zelenskyy revealed his call with Biden earlier today, thanking him for supporting Ukraine with US defense assistance & anti-Russian sanctions.
Ukraine’s Zelenskyy speaks to Biden as vast Russian convoy nears Kyiv
Gold futures climbed sharply to mark their highest finish in 13 months, buoyed by a broad flight to the perceived safety of precious metals & gov bonds, as Russian forces continued to shell Kharkiv, Ukraine's 2nd-largest city, & signaled they would target intelligence & communication facilities in the capital Kyiv. Russia's invasion of Ukraine was in its 6th day & has drawn swift & severe financial sanctions from an array of Western nations, which has injected a fresh dose of turbulence in markets. Apr gold rose a massive $43 (2.3%) to settle at $1943 an ounce, the highest most-active contract finish since Jan 2021. Prices scored a rise of 5.8% in Feb, the largest since May. Investors weighed the implications of the invasion on the outlook for inflation & global growth, as well as how central banks, particularly the Federal Reserve, will respond. The gains for safe-haven gold also come as the yield on the 10-year Treasury note dropped to around 1.68%, compared with 1.836% yesterday's close. In addition to bonds & gold, crude-oil prices have shot higher, with West Texas Intermediate oil topping $100 a barrel stoking concerns of near-term inflation pressures, which is bullish for bullion.
Gold futures settle at a 13-month high as flight to havens continues amid Russia’s Ukraine siege
Crude-oil futures saw double-digit percentage gains at today's peak, with the advance picking up steam even after a number of countries announced a coordinated release of emergency reserves. Historically, oil eventually confronts the gravitational pull lower from such releases in the limited number of times that such emergency releases occur. Apr West Texas Intermediate crud finished the day up 8% at $103 a barrel, with futures running higher as Russia's siege of Ukraine entered a 6th day & Western sanctions against the Kremlin were taking a toll on supplies amid the threat of a global shortage that had already been in place due to the COVID pandemic. Prices had extended their gains after the Intl Energy Agency announced that its member countries, including the US, had agreed to release 60M barrels of oil from their emergency reserves to ease any supply shortfall resulting from Russia's invasion of Ukraine. Over the longer term, futures are likely to retreat substantially, if the limited history is any guide. During the past 3 emergency releases from the US Strategic Petroleum Reserve, in 1991, 2005 & 2011, oil has had a tendency to decline in 6 months to a year afterward. In 1991, the Gulf War helped to drive prices higher but an emergency release was followed by price declines that saw crude down nearly 41% a year after the announcement. In 2005, a release after Hurricane Katrina devastated Gulf Coast oil production saw prices fall in subsequent weeks & months before rebounding to trade with a slight 2.4% gain a year out. The Paris-based IEA announced that its member countries would release a similar amount of reserves back in 2011, during the Libyan crisis, with values for crude down 12.4% 12 months later, after showing some resilience in the shorter term after the drawdowns were declared. To be sure, it is unclear what crude futures will do this time with growing uncertainty surrounding the intensity of Russia's attack in Ukraine. Russia is one of the biggest suppliers of oil & gas throughout the world & matters could get worse before they get better. Meanwhile, the broader market was in free fall, with the Dow, NAZ & the S&P 500 index trading lower, with only the broad-market benchmark's energy sector showing buoyancy.
Oil surges, but history says prices eventually fall after countries release emergency reserves
Dow Jones Industrials
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