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Russia’s next hat trick

Mar 02, 2022

Good morning!

Futures are up as the street attempts to refocus on the Fed which, in turn, sets the stage for the jobs report. Oil at $110 a barrel is front and center as you might imagine.

My good friend Ray Wang and I had a few thoughts on both this morning during an appearance with the fabulous Maria Bartiromo. (Watch)

Here’s my playbook.

1 – Powell would be a fool to raise rates

Powell would be a fool to raise rates into the current environment – Ukraine, slowing growth – but will probably do so anyway to prove a point. What that is I have no idea.

My hope is he is smart enough to dial it back a bit. “Flexible” is the word I want to see.

I suggested a few speculative calls late yesterday on the S&P 500 and Nazzy that could pay off if the futures rally that’s underway as I type in the wee hours holds.

2 – Meanwhile in DC

The President tried hard to paint a good picture, to convey plans to help the American people and, of course, stand up to Putin. I get it – that’s his job. (Read)

Problem is, Washington et al is delusional.

What’s happening now is not a political problem for the right or left … it’s an American problem.

Releasing oil from the strategic reserves has us covered for about 24 hours and will be about as effective as erstwhile rapper Razzlekhan’s plans to launder $4.5 billion in stolen bitcoin.

Politicians of both stripes should be falling all over each other to help the American people who elected them to lead instead of posturing, bickering and finger-pointing.

The time has passed for political gamesmanship … restart our energy industry, create a modern CCC that puts people to work instead of jawboning about incentives, help Americans put food on the table and not spend so much to do it.

My take on what it would take to tame inflation, how long it’ll last and more with Scott “the Cow Guy” Shellady, ahead of last night’s SOTU (Watch)

3 – A bank runskie of epic proportions

Take away the cell phones and the modern signage, and pictures of Russians queuing at their banks may as well be from the Soviet era. (Read)

No surprise the Russian central bank doubled rates from 9.5% to 20% in an effort to convince citizens to keep their money in Russian banks.

Only the oligarchs don’t which is why I won’t be surprised to see Panamanian corporations flourish in six months.

4 – American Farmers will get hit hardest by Russian sanctions

Many people are saying that the US economy is immune from Russian sanctions but that’s not true. Russia supplies a good chunk of Europe’s oil and potash. Our farmers depend on both. The former for equipment and the latter for fertilizer. (Read)

So far, the flight to quality and related impact has been “predictable” according to the boffins but that could change in a heartbeat. Ukraine is among the world’s top five exporters of sunflower oil, barley, wheat, and corn. The dynamics will change.

5 – Walmart for people who think they’re above it all

Target released great earnings but the real takeaway is solid guidance. (Read)

As much as I like that, my favourite retail stock is doing even better. It’s up 18.9% versus the S&P 500 which has dropped -2.3% since I recommended it last August.

If you’re a part of the One Bar Ahead™ Family, chances are you know what that is and are smiling ear to ear. If not and you’d like to be, click here.

The March issue drops Friday, along with my thoughts on which companies to buy right now and why.