Dow dropped 421, decliners over advancers a mild 5-4 & NAZ retreated 70. The MLP index added 1 to the 205s & the REIT index crawled up 1+ to the 452s. Junk bond funds climbed higher & Treasuries were very heavily purchased again, taking the yield on the 10 Year Treasury down an enormous 12 basis points to 1.72%. Oil soared 8+ to the 106s (more below) & gold skyrocketed 26 to 1927.
AMJ (Alerian MLP index tracking fund)
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The Us & its allies continue to ramp up the economic pressure on Russia following the country's decision to invade Ukraine. Yesterday, the NYSE temporarily halted trading of select Russian-based companies, including Mechel PAO American Depositary Shares, Mobile TeleSystems Public Joint Stock Company & Cian PLC American Depositary Shares. Meanwhile, NAZ said it would halt Yandex, known as Russia's Google & online retailer Ozon, as well as Nexters, QIWI, & Head Hunter Group. Sources have said that the halts, which can be used for unusual trading in any security, will allow time for officials to review the fast-moving developments in the Russia-Ukraine conflict that are impacting the shares. In conjunction & cooperation with the EU, Japan, the UK, Canada & others, the US States has effectively frozen financial transactions of Russian central bank assets held by Americans, a senior administration official told reporters. The intended effect is to cripple the Russian economy & use up the country's "rainy day fund" as its currency, the ruble, plummets in value. That rainy day fund was built up to defend against economic consequences when Russia invaded Crimea in 2014. According to the Treasury Dept's Office of Foreign Assets Control (OFAC), this is not a complete & total block of the central bank, as OFAC is authorizing certain transactions with Russia's central bank that are "energy-related." OFAC added that additional authorizations could follow if necessary.
Russia's economy gets nailed: What's been done so far
Oil prices surged, with US crude hitting its highest level since 2014 as Russia bears down on Ukraine's capital. Prices first topped the $100 mark Thurs when Russia invaded Ukraine, prompting fears of supply disruptions from key exporter Russia, in what is already a very tight market. West Texas Intermediate crude futures, the US oil benchmark, jumped more than 8% to $103.54 per barrel. Intl benchmark Brent crude advanced 7.7% to trade at $105.53 per barrel. The contract rose to $105.79 last week, the highest since 2014. Yesterday Canada said it was banning Russian oil imports, but so far it's the only nation to target Russia's energy complex directly. The financial sanctions imposed by the US & Western allies could carve out room for energy payments to continue. But the ripple effects are already showing. Ahead of Russia invading Ukraine the global oil market was already tight. Demand has bounced back, while supply has remained constrained. OPEC & its oil-producing allies, which includes Russia, will meet this week to discuss output for Apr. The Intl Energy Agency (IEA) reportedly agreed today to release 60M barrels of oil from global reserves, according to Japan's industry minister. Of the total the US will release 30M barrels. IEA's exec director Fatih Birol tweeted yesterday that the group was holding an “extraordinary” meeting to discuss “the impact of Russia's invasion of Ukraine on oil supply & how IEA members can play a role in stabilizing energy markets.”
U.S. oil jumps to 7-year high above $101 a barrel as on supply shortage fears
Texas Attorney General Ken Paxton is leading a coalition of states suing the Environmental Protection Agency (EPA) over new oil & gas rules while blasting Pres Biden's as having declared "war against fossil fuels." Paxton issued a press release about the lawsuit against the EPA that 14 other states have signed onto, warning the federal regulations "will create a deliberate disadvantage to Texas and all states" involved in oil & gas production. "At a time when American gas prices are skyrocketing at the pump, and the Russia-Ukraine conflict shows again the absolute need for energy independence, Biden chooses to go to war against fossil fuels," Paxton added. "These severe new rules proposed by the EPA are not only unnecessary, but they will create a deliberate disadvantage to Texas and all states who are involved in the production of oil and gas," he warned. "I will not allow this federal overreach to wreak havoc on our economy or the livelihoods of hard-working Texans." Paxton's office also blasted Biden's "bureaucratic decrees" on the fossil fuels industry as micromanaging "greenhouse gas emissions for cars and trucks, far exceeding EPA’s authority and violating the U.S. Constitution’s separation-of-powers principles." Paxton's office warned that the regulations would "impose major economic harms on Texas" by decreasing the amount of gas consumed "by billions of gallons" & putting stress on the state's electric grid. Joining Texas on the lawsuit are 14 other states, including Alaska, Arkansas, Oklahoma & South Carolina.
15 states sue EPA over new oil and gas rules
While stocks are being sold, it's not as bad as it could have been. The advanve-decline ratio is modest. Oil is getting a lot of attention with prices at some of the highest levels in history. Tomorrow OPEC has their monthly meeting & there is an excellent chance they will agree to pump much more oil given world events.
Dow Jones Industrials
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