Here are five things you must know for Thursday, February 24:
1. — Stock Futures Plunge As Russia Launches ‘Full Scale’ Ukraine Invasion
U.S. equity futures plunged lower Thursday, while global oil prices soared past $103 dollars per barrel and Treasury bond yields tumbled in safe-haven trading following Russia’s full-scale invasion of Ukraine.
In what has been described as the largest military attack on European soil since the Second World War, Russian troops marched across the border into the eastern region of Donbass, accompanied by hundreds of tanks and advanced by missile attacks on several Ukrainian cities, with reports of explosions in the Kyiv capital.
“President Putin has chosen a premeditated war that will bring a catastrophic loss of life and human suffering,” U.S. President Joe Biden said in a statement late Wednesday. “Russia alone is responsible for the death and destruction this attack will bring. The world will hold Russia accountable.”
The United Nations Security Council has said it will hold an emergency meeting later Thursday.
Global stocks tumbled in the wake of the invasion, with the MSCI World index falling 1.37% by the start of trading in Europe and Asia’s MSCI ex-Japan index, the regional benchmark, plunging 3.5%.
Oil prices raced higher in anticipation of supply disruptions and sanctions on the export of Russian crude, which comprises around 10% of global supply, with WTI futures for April delivery soaring $7.89 to a 2014 high of $100.01 per barrel.
On Wall Street, futures linked to the Dow Jones Industrial Average are priced for a 700 point opening bell decline, a move that would take the average to its lowest levels in more than 9 months, while those linked to the S&P 500 are priced for an 87 point retreat.
Nasdaq Composite futures are indicating a 365 point slump for the tech-focused benchmark as 10-year Treasury note yields tumbled to 1.87% in overnight trading.
2. — Oil Prices Surge Past $100 As Sanctions on Russian Crude Loom
Global oil prices soared past $100 per barrel for the first time since 2014 Thursday in the wake of Russia’s decision to launch a major invasion of neighboring Ukraine.
Sanctions on the sale of Russian crude, the world’s second-largest supplier behind Saudi Arabia, are expected from Western leaders later today following the invasion, which could also disrupt key natural gas pipelines that are crucial to the energy region’s energy mix.
The Biden administration signaled Wednesday that it could tap the nation’s Strategic Petroleum Reserve if prices were to spike following a Russian attack, but stockpiles are at their lowest levels since 2002 following the President’s move to release 50 million barrels last November.
“Depending on the response from the U.S. and Europe, oil and gas prices are at risk of significant further rises, thereby reinforcing inflationary pressures and weighing on global growth, and eventually demand for crude oil,” said Ole Hansen, head of commodities strategy at Saxo Bank. “Focus today being the U.S. and European response, comments from Saudi Arabia and China, the world’s biggest producer and consumer of oil.”
Brent crude futures for April delivery, the global pricing benchmark, soared $8.36 to trade at $105.19 per barrel in early European dealing, while WTI futures for the same month, which are tightly linked to U.S. gasoline prices, surged $7.80 to $100.01 per barre.
3. — Safe Havens Surge As Russia Attacks Ukraine, With Gold Testing $2,000
Global investors ran for the cover of safe-haven assets in the wake of Russia’s comprehensive attack on Ukraine, with U.S. Treasury bond yields tumbling, gold rising closer to the $2,000 mark and the U.S. dollar booking solid gains against its global peers.
Benchmark 10-year Treasury note yields fell to 1.871% in overnight trading, a decline of around 13 basis points from yesterday’s levels. The moves have slashed bets on an aggressive Fed rate hike next month, with the odds of a 50 basis point increase falling to just 17.2% according to the CME Group’s FedWatch tool.
Gold prices were marked 3% higher on the session at $1,965 per ounce, the highest since November of 2020. The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.69% higher at 96.884, the highest in nearly a month.
Bitcoin, however, was firmly on the back foot, falling 6.6% to just over $35,000 each.
eBay (EBAY) – Get eBay Inc. Report shares tumbled in pre-market trading after the online marketplace posted stronger-than-expected fourth quarter earnings but cautioned on slowing growth in the months ahead.
eBay said holiday quarter profits rose to $1.05 per share, on revenues of $2.61 billion, but forecast flat earnings and lower revenues for the current three-month period as it struggles with a declining customer base as pandemic re-openings erode part of its online appeal.
“2022 will be the tale of two halves. During the first half of the year with less significant mobility and macro tailwinds from 2021 as margins pressured as we scale investments sequentially,” CFO Steve Priest told investors on a conference call late Wednesday. “During the second half, we should observe the cleanest year-over-year comps, we have encountered since entering the pandemic revealing the underlying growth and earnings power of our business.”
eBay shares were marked 10.2% lower in pre-market trading to indicate an opening bell price of $49.05 each.
5. — Ford CEO Says ‘No Plans’ To Spin-Off EV Business
Ford (F) – Get Ford Motor Company Report shares moved lower in pre-market trading after CEO Jim Farley said he has ‘no plans’ to spin-off the carmaker’s growing electric vehicle division.
Speaking to an investor even late Wednesday, Farley said that both the group’s EV and legacy combustion-engine (ICE) divisions are underperforming in terms of earnings generation, “”We know our competition is Nio and Tesla, and we have to beat them, not match them … and we also have to beat the best of the ICE players.”
Bloomberg News reported last week that Farley is considering ways to separate the division, which is targeted with billions of investment over the coming years, from its ICE business.
“We have too many people, we have too much investment, we have too much complexity and we don’t have expertise in transitioning our assets,” Farley said. “(But) we have no plans to spin off our electric business or our ICE business.”
Ford shares were marked 3.7% lower in pre-market trading to indicate an opening bell price of $16.32 each.