Russian troop building on Ukrainian border, potential Fed rate hike, choppy markets

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NATO has disputed Russia’s claim that it will withdraw troops from the Ukrainian border, stoking geopolitical tensions associated with the upcoming release of Federal Reserve minutes to halt a rally in US stocks.

Key points to remember

  • The stockpile rally came to a halt after NATO disputed Russian claims of troop withdrawals from the Ukrainian border.
  • Investors are waiting for the release of the Federal Reserve’s January minutes for clues on how quickly interest rates will be raised.
  • Crude oil continued its upward march on Eastern European border tensions

The Dow Jones and S&P 500 are down more than half a percent, while the Nasdaq is down 1%, a day after all three indices jumped on what appeared to be an easing of tensions in Eastern Europe. ‘East.

Tech stocks lead the decline, Apple Inc. (AAPL) and Microsoft Corp. (MSFT) both losing 1%. Shares of Meta Platforms Inc. (FB) are down 2.5% on a report that executives held a company-wide meeting aimed at introducing new corporate values ​​and upping the ante. moral. Shares of ViacomCBS Inc. (VIAC) plunge after the media company announced it was renaming itself Paramount and increasing spending to compete with competing streaming services. Shares of Netflix Inc. (NFLX) and Discovery Inc. (DISCA) are also down. Shares of Carmax Inc. (KMX) tumble on analyst downgrade.

Rise in oil and gas prices

Ukrainian headlines push oil futures up 2.5% and gasoline prices up 1.5%. This increases the shares of Marathon Oil Corp. (MRO) and other energy companies. Shares of Generac Holdings Inc. (GNRC) are soaring after the generator maker said it expects exceptional revenue growth this year.

The yield on the 10-year Treasury note is hovering around 2.05% before the release of the Fed minutes. Bitcoin and other major cryptocurrencies are trading lower. The euro strengthened against the dollar.

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Chart of the day: Shopping spree

U.S. retail sales jumped more than expected last month amid rising inflation and demand for online shopping.

The Census Bureau reported January retail sales rose 3.8%, well above economists’ forecasts and a reversal of December’s revised 2.5% decline. This is the largest monthly percentage increase since last March.

Non-store retailer sales, which include online shopping, saw the biggest increase, up 14.5%. Furniture and home furnishings stores posted a 7.2% increase in sales, while motor vehicle and parts dealers recorded a 5.7% increase in sales.

Lower gasoline prices led to a 1.3% drop in gas station sales, although sales rose 33.4% year over year. The continued impact of the omicron variant of COVID-19 caused restaurant and bar sales to fall by 0.9%. Other businesses that saw lower sales were sporting goods, hobby, musical instrument and book stores, health and personal care stores and miscellaneous retailers.

Sales from November to January

The Census Bureau noted that sales during and immediately after the holiday season advanced, with November-January sales up 16.1% from the same period a year ago.

Action of the day: Shopify (SHOP)

Shares of Shopify Inc. (SHOP) tumble after the e-commerce platform warned that a drop in online shopping as COVID-19 restrictions end will reduce first-half revenue.

Shopify said its full-year sales won’t match the 57% increase in 2021 due to a number of headwinds. He noted that, for the first six months of 2022, the acceleration in online shopping triggered by COVID-19 lockdowns and government stimulus measures will fade. The company also pointed to higher inflation which will impact consumer spending in the near term.

Shopify expects revenue growth to be lower in the current quarter and higher in the fourth quarter.

The fourth quarter beats the estimates

The company also announced that fourth-quarter 2021 sales jumped 41% to $1.38 billion, and earnings per share were $1.36. Both were better than analysts’ forecasts.

Shopify shares are down 17% today. They have lost about half their value over the past year.

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