Volatile equities session, Lowes delivers, bitcoin steadies

US slaps Russia with soft sanctions

President Biden’s sanctions on Russia were about as harsh as my disciplining my daughter when she gives me puppy dog eyes.  US stocks tentatively rebounded as some cash-strapped investors could not pass up buying the S&P 500 at a 10% discount and on the soft start of sanctions against Russia. It is hardly far from a de-escalation of tensions, but many traders thought the sanctions against Russia were going to be hard-hitting and send a message to Moscow.  Instead of going after a major piece, President Biden’s first round of sanctions looked more like they captured ‘poison pawn’ as the sanctions targeted Russian sovereign debt, a couple of banks and a few key individuals.

Equities started to give up gains after reports that the US believes Russia will invade Ukraine in 48 hours.  Ukraine was also hit with another DDOS attack, impacting several government and bank websites.  Last week, Ukraine was hit with its largest cyberattack in history.

Traders tried to rationalize a reason for the morning rally; a less aggressive first move by Fed, no immediate escalation with the Ukraine situation, and time to ‘buy the dip’, but in the end they could not shake off the growing risk of a Russia-Ukraine war.

Stocks are going to struggle to find direction until financial markets have a clear answer on whether the Russia-Ukraine crisis will have a diplomatic solution or regional warfare.

Lowes

Following Home Depot’s earnings results, the bar was set low for Lowes and they delivered.  Home Depot shares got crushed despite strong results as investors began to worry that the gross margins will struggle going forward.  Lowes delivered strong earnings and raised its outlook as the company seems confident they can expand operating margin.  Lowes is starting to look like the preferred home-improvement stock for some investors who view them as having bigger upside potential with going after pro customers.

Bitcoin

Bitcoin is holding up nicely given the intensifying Russia-Ukraine crisis.  Many crypto investors have been humbled by the last crash and while they will remain patient and will wait for their existing positions to turn positive, they are hesitant to increase holdings given the tremendous uncertainty for risky assets.

Bitcoin will likely see decent resistance from the USD 40,000 level as geopolitical tensions will prevent risky assets from mustering up much of a rally.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya