Stocks reversed early losses to close higher on Monday to build on two straight weeks of gains as investors continue to digest developments coming out of Russia’s invasion of Ukraine and a busy week chock full of new economic data. The price of crude oil, which spiked to $130 directly after Russia’s invasion,  fell more than 9% to $103 per barrel.

Markets Today

  • S&P 500 (SPY): +0.71%
  • Nasdaq (QQQ): +1.55%
  • Dow Jones (DIA): +0.27%
  • Russell 2000 (IWM): +0.03%
  • Volatility Index (VIX): -5.67%
  • GameStop (GME): +24.77%
  • AMC Entertainment (AMC): +44.91%
  • Tesla (TSLA): +8.03%
  • Amazon (AMZN): +2.56%
  • Cloudflare (NET): +5.56%
  • Block (SQ): +5.98%
  • Rolls-Royce (RYCEY): -12.17%
  • Sonos (SONO): +14.13%
  • Newegg Commerce (NEGG): +37.60%

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On Friday, the US and allies levied new sanctions against Russia in response to its unwarranted invasion of Ukraine. The new sanctions target hundreds of members of the Russian parliament and the CEO of the largest bank in the country. Most significantly, the US Department of the Treasury warned that any gold-related transactions involving Russia may be sanctionable by US authorities. 

A senior administrator at the Treasury said, “Our purpose here is to methodically remove the benefits and privileges Russia once enjoyed as a participant in the international economic order.” As a reminder, Russia has already been expelled from the SWIFT international payment system, which essentially freezes banks from sending or receiving transactions. The move comes as President Joe Biden and NATO allies convene in Brussels for a series of summits to discuss the conflict.

In the US, the Federal Reserve has the inevitable task of reigning in the fastest pace of inflation in over forty years without tanking the economy and plunging us into a recession. To that end, last week, the Federal Reserve raised the interest by 0.25% from near-zero levels for the first time since 2018 and committed to shrinking the balance sheet.

He said the Fed was ready to “take necessary steps to ensure a return to price stability. In particular, if we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings, we will do so. And if we determine that we need to tighten beyond common measures of neutral and into a more restrictive stance, we will do that as well.”

Later this week, the Bureau of Labor Statistics is set to release the March job report, which will give a clearer picture of the state of the labor market in the US. Labor market tightness is a strong influence on the Fed’s decision to begin tightening monetary policy, with historically low levels of unemployment coupled with a record number of job openings suggesting the economy is strong enough to absorb these hikes. The report is likely to show another robust reading with payrolls expected to rise by 490,000, according to Bloomberg economist estimates.

Christopher Rupkey, Chief Economist at FWDBONDS, said “The payroll jobs report could be the biggest one yet in this recovery from the pandemic. “Federal Reserve officials are already chomping at the bit for bigger 50 bps rate hikes at upcoming meetings, and the tightest labor market since the 1960s is like pouring gasoline on the fire were any policy official worth his or her salt is burning with desire to get interest rates up to 2% neutral levels now. 

In other economic news,  is a fresh read on the monthly personal consumption expenditures (PCE) deflator due out Thursday. The gauge is another indicator of how quickly prices are increasing across the country. Consensus economists expect the PCE to post a rise of another 0.6% in February, according to Bloomberg data. Core PCE, which is the measure the Fed uses to conduct monetary policy, is also expected to show a 0.3% month-over-month increase to 5.5%. 

Highlights

  • Shares of Tesla (TSLA) gapped up more than 8% after the company announced it was planning its second stock split in two years.
  • Shares of meme stocks GameStop (GME) and AMC were on the move sharply higher again today. Congrats Apes!
  • German luxury carmaker Porsche is reportedly working with U.S. lithium metal battery manufacturer QuantumScape Corporation (QS) to develop an electric version of its 911 vehicle, powered by solid-state batteries.
  • Walmart Inc. (WMT) will halt tobacco products sales in some of its stores, the company said Monday, without indicating how many locations specifically would be affected by the decision.
  • Amazon (AMZN) becomes the first mega-cap tech stock to erase year-to-date losses after this recent rally. 
  • HP Inc. (HP) has set out to acquire audio and video devices maker Poly in a deal valued at $3.3 billion
  • The Dutch consumer watchdog on Monday levied a tenth weekly fine against Apple for failure to comply with an order to make it possible for dating app providers in the Netherlands to use non-Apple payment methods.
  • Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. urged the U.S. to allow foreign companies to participate in a $52 billion federal program aimed at boosting chip production on American soil.
  • Apple TV+ made history on Sunday as the first streaming service to win a best picture Oscar for “CODA”.
  • Tesla Inc Chief Executive Officer Elon Musk is giving “serious thought” to building a new social media platform, the billionaire said in a tweet on Saturday. Musk was responding to a Twitter user’s question on whether he would consider building a social media platform consisting of an open source algorithm and one that would prioritize free speech, and where propaganda was minimal.

“Don’t judge each day by the harvest you reap but by the seeds that you plant.” Robert Louis Stevenson