It feels weird writing this post about the stock market when there is something as serious as the Ukraine Russian war going on. This is a historical moment we are living through and after this. I do not think it is hyperbolic to say the world will never be the same again. Especially with the relationships countries have with Russia moving forward.
However, we do not have control over anything that is happening. All we can do is pray for them and stay informed. If it is too much for you to take, please turn off all the things and stop reading. There is so much happening and sometimes we just need to let our minds rest.
Also, these are the moments we are reminded of the important things in life. So go love on those you love. Let them know how you feel and amend those broken bridges.
Now into the not so important but weirdly important stock and economy talk. First of all, the weirdest thing happened last week after Russia invaded. Initially, the stock market tanked as much as 3% overnight which makes sense. However, by the end of the day on Thursday, the stock market had recovered all the losses and finished very strongly in the green. It was so weird but that is the thing about the Stock Market:
IT IS HEARTLESS!!
MY TAKEAWAY is the same as always. We play the long game, through various geopolitical crises the Stock Market has proved to have a way of ignoring reality.
So those of us investing for the long term aka 10+ years or even medium-term (3-10 years), we do not change our strategy. We remain invested and keep on keeping on.
The best thing to do to your portfolio during chaotic times is to DO NOTHING. Stay on the path you created when things were looking great.
Side note: when fear is at its all-time high is always a great time to poach great businesses for those who are single stock buyers.
Tale of the Tape
ECONOMY
After Russia invaded Ukraine, Western governments including the US, Australia, New Zealand, UK, Japan, and Canada (the G7) hit Russia with sanctions. Some of the harshest we have ever seen put on a nation:
Russia's largest financial institutions were cut off from the US financial systems
Export controls on high tech parts Russia need for their defense and economy
Debt restrictions on Russian state-owned enterprises and entities which hold about $1.4 trillion in assets
Russian elites and their families had their funds frozen
According to Edward Fishman, former sanctions lead in the Obama administration, “The Russian financial sector is by and large isolated now from the global financial system.”
Although that all sounds good, there is one hammer that the US and partners did not drop on Russia. Western leaders did not block Russia from SWIFT, a messaging network used by banks that is key to the international financial system. This would have really isolated Russia from the rest of the world. Two possible reasons why the US and other EU nations are choosing not to make this move is:
Their citizens still use Russian energy to keep the lights on, so shutting kicking Russia off Swift would result in a colossal headache for everyone involved.
The US is worried that kicking Russia off Swift would threaten the dominance of the US dollar as the reserve currency of the world. Pushing Russia and China to work together and develop an alternative payment system.
But as Chris Miller, director of the Eurasia program at the Foreign Policy Research Institute said, limiting the sale of oil and gas for Russia will be the nail in the coffin. But to play that card, Europe will have to carry a great burden as they rely heavily on Russia for oil and gas.
This war will have multiple effects throughout the world in various ways:
Russia and Ukraine account for almost 30% of the global wheat exports
They account for 20% of the corn trade
80% of sunflower oil production
Russia is also the 3rd biggest oil provider in the world.
In response, Russia could do any of the following or all of the following:
Withhold neon gas (which is used for manufacturing semiconductors and 70% of which comes from Ukraine)
Ban Western airlines from flyover routes to Asia, or even consider cyberattacks against US or EU financial institutions.
Protests have broken out all over Russia with over 1700 people being detained. Multiple Russian celebs are speaking out against the war. This is a BIG DEAL!!
This does not usually happen in Russia, if you say anything against the government you are basically dead. But for people to stand up to this degree you can see just how much NO ONE wants this war. But we have an SENILE OLD MAN, who is thinking about the glory days. So SAD!
Ukraine President Volodymyr Zelensky,
The enemy has marked me down as the Number 1 target. My family is the Number Two target. They want to destroy Ukraine politically by destroying the head of state.
One thing to watch: The US tried repeatedly to get China to help talk Putin out of an invasion. China said NAH!
What does it mean for the future?
I have no idea but here is a good quote about where we are right now as a world.
Form Dan Schwerin, a long-time adviser to Hillary Clinton,
Looking Ahead
ECONOMY
A new month brings about a slew of economic data: from jobs to inflation to Consumer Sentiment. Next week, we get the Beige Book which is officially called the Summary of Commentary on Current Economic Conditions (but ain't nobody about to be calling it that). It is a qualitative report published by the Federal Reserve about the Economy. The Data is compiled by the 12 district banks in the US about each district's specific economy. The FOMC uses that information to make decisions.
This week Jerome Powell heads to testify before Congress on the state of the economy and his plans moving ahead. Expect his answers to Congress to shape the way the market moves next week. This comes ahead of the all-important FOMC meeting on March 15, where the expectation is for the Fed to announce a rate hike.
One thing to listen for is if there has been a change to the Fed's strategy for the year due to the Ukraine Russian war.
EARNINGS
Another Eh week for me when it comes to stocks. But there are a few interesting companies reporting such as:
Zoom went from pandemic darling to destroyed.
Stock is down 80% from its all-time highs of 2020.
Pandemic went from being the best thing to ever happen to Zoom to be the worst thing ever for their future growth potential.
It will be interesting to see how they recover from it.
Target also reports this week.
People love to shop at Target, it is kinda insane how much people love Target.
I expect Target to report earnings similar to Walmart cause people talk about inflation but people still spending all kinds of money
The Rest of Em:
#earnings for the week eps.sh/cal $SOFI $LCID $AMC $ZM $TGT $BRK.B $PLUG $NVAX $CRM $SE $MRVL $COST $BLNK $RIDE $BIDU $BBY $VTRS $WISH $AVGO $SNOW $DQ $DPZ $BROS $CHPT $WDAY $PUBM $AI $BLDR $WKHS $KSS $PSFE $PRTY $BNGO $AUPH $HPQ $DDD $SDC $BFLY $CPNG $AZO $UWMC
Totally Unnecessary Man U Update
Man U Man U Man U
I don’t even know at this point. We keep doing this over and over.
Just MEH ALL THE WAY
Thank you for reading
I hope you all have A WONDERFUL WEEK. I will see you back here maybe on Wednesday for another post. In the meantime, Go subscribe to Rambling Mind Podcast for mid-week stock market updates. You can also catch me on TikTok, Instagram, and YouTube every day.
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God bless Each and Everyone of y’all
✌🏾