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Equities Tumble, Bonds and Oil Surge, as Russia Attacks Ukraine

Brent crude hit $105 in the wake of Putin's attack.

Video source: YouTube, BBC News

Stocks are sharply lower Thursday morning after Russia launched its military invasion of Ukraine overnight.

Though slightly above the bottom at the market open, the S&P 500 is still down 1.1%, the Nasdaq Composite is 0.4% lower, Dow Industrials are falling 2.0% and the Russell 2000 is off 1.1%, as of 10:30 am ET.

Bitcoin is leading cryptocurrencies sharply lower, down 4.5% from last night.

Investors are unsurprisingly pouring into bonds, seeking some measure of safe haven, driving yields on the 10-year note down to 1.86%.

Brent crude is up over 7% to $104 per barrel, while West Texas Intermediate is also up over 7% to nearly $99 per barrel. Both the global and US benchmarks are at their highest levels since 2014.

Russia is the world’s third leading producer of oil and second leading exporter. The attack on Ukraine by Russia exacerbates supply concerns that have already been elevated for many moons.

Investors will be eager to learn about the next level of sanctions to be imposed by President Biden and European leaders on Russia. As Shashank Joshi, defense editor of The Economist wrote this morning, “Russia was not threatened by NATO or Ukraine. Its invasion of the sovereign state next door is a war of choice, conjured out of nothing by Mr Putin. History will judge him harshly.”

Options insight

Perusing active options trader data from Trader API last week, we saw Amazon AMZN and Nvidia  NVDA prominent among bull names. AMZN has fallen nearly 20% since its November 2021 highs, while NVDA has plunged 27% since then. These two top-five Nasdaq Composite constituents have driven the index into bear market territory.

AMZN was also the most active single stock option among bear names last week, with other significant activity seen in Overstock OSTK  options. OSTK has collapsed by nearly 60% since its November 2021 peak, setting a 52-week low this past Monday.

Source: Data from Tradier, table from Equities News


Source: Equities News

The Fed model compares the return profile of stocks and US government bonds.