Morning: Spike in oil prices sends futures lower, although losses have been cut

The S&P 500 futures trade 26 points, or 0.6%, below fair value after WTI crude futures hit $130 per barrel last night. Futures have cut their losses, though, as oil prices for the April contract now trade at $120.42/bbl (+$4.74, +4.1%).

The initial pop in oil was driven by a confirmation from Secretary of State Blinken that there are active talks to potentially ban imports of Russian oil and a report from Reuters indicating that an Iran nuclear deal could be delayed.

Besides the retracement in oil, which are trading under $100 per barrel for contracts at the end of the year, the futures market has welcomed news that ceasefire talks will continue today in addition to positive-sounding corporate news.

Specifically, Uber ( UBER 31.01, +1.18, +4.0%) raised its Q1 Adjusted EBITDA guidance range, Oasis Petroleum ( OAS 153.70, +9.21, +6.4%) and Whiting Petroleum ( WLL 88.00, +4.57, +5.5%) agreed to a $6.0 billion merger of equals, and Bed Bath & Beyond ( BBBY 27.31, +11.13, +68.8%) has popped 70% on news of turnaround interest from Ryan Cohen.

Treasury yields are trading higher, as risk sentiment lightens up. The 2-yr yield is up four basis points to 1.53% after touching 1.42% overnight, and the 10-yr yield is up five basis points to 1.77% after dipping below 1.70% overnight. The U.S. Dollar Index is up 0.3% to 98.91.

Today’s economic data will be limited to Consumer Credit for January (Briefing.com consensus $25.0 billion) at 3:00 p.m. ET.

In U.S. Corporate news:

  • Bed Bath & Beyond (BBBY 27.31, +11.13): +68.8% on news that Chewy co-founder Ryan Cohen has pushed for changes after acquiring a 9.8% stake in the company, according to The Wall Street Journal .
  • Occidental Petroleum (OXY 61.23, +5.08): +9.1% amid the higher oil prices and a report from The Wall Street Journal indicating that Carl Icahn has divested his stake in the company.
  • Uber (UBER 31.01, +1.18): +4.0% after raising its Q1 Adjusted EBITDA expectations to between $130 million and $150 million (from $100 million to $130 million).
  • Oasis Petroleum (OAS 153.70, +9.21): +6.4% after agreeing to merge with Whiting Petroleum (WLL 88.00, +4.57, +5.5%) in a $6.0 billion merger of equals transaction.

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region began the week on a lower note as sentiment remained pressured by ongoing fighting in Ukraine and rising commodity prices. Japan‚Äôs Nikkei: -2.9% Hong Kong‚Äôs Hang Seng: -3.9% China‚Äôs Shanghai Composite: -2.2% India‚Äôs Sensex: -2.7% South Korea‚Äôs Kospi: -2.3% Australia‚Äôs ASX All Ordinaries: -1.0%.

    • In economic data:
      • China‚Äôs February trade surplus $115.95 bln (expected surplus of $99.50 bln; last surplus of $94.46 bln). February Imports 15.5% yr/yr (expected 16.5%; last 19.5%) and Exports 16.3% yr/yr (expected 15.0%; last 20.9%). February FX Reserves $3.214 trln (expected CNY3.225 trln; last CNY3.222 trln)
      • Australia‚Äôs February AIG Services Index 60.0 (last 56.2) and February ANZ Job Advertisements 8.4% m/m (last -0.7%)
    • In news:
      • China‚Äôs National People‚Äôs Congress set a 5.5% growth target for 2022, its lowest in 30 years.
      • National Development and Reform Commission vice chair said that reaching the target will require ‚Äústrenuous effort.‚ÄĚ
      • Top Chinese officials are increasing focus on strengthening the domestic supply of food.
  • Major European indices trade in the red as sentiment remains pressured by fighting in Ukraine and rising commodity prices. STOXX Europe 600: -1.4% Germany‚Äôs DAX: -1.3% U.K.'s FTSE 100: -0.6% France‚Äôs CAC 40: -0.9% Italy‚Äôs FTSE MIB: -0.3% Spain‚Äôs IBEX 35: -0.6%.

    • In economic data:
      • Eurozone‚Äôs March Sentix Investor Confidence -7.0 (expected 5.3; last 16.6)
      • Germany‚Äôs January Factory Orders 1.8% m/m (expected 1.0%; last 3.0%). January Retail Sales 2.0% m/m (expected 1.8%; last -4.6%); 10.3% yr/yr (expected 9.8%; last 0.8%)
      • U.K.'s February Halifax House Price Index 0.5% m/m (expected 1.0%; last 0.2%); 10.8% yr/yr (last 9.7%)
      • Swiss February Unemployment Rate 2.2% (expected 2.3%; last 2.3%)
    • In news:
      • Heating gas prices in Europe have continued ring to fresh highs while Brent oil has eclipsed $125/bbl.
      • Another round of case-fire talks is expected to be held today.
      • Spain‚Äôs economy minister said that a way to cap energy prices is being studied.
      • European Commission President von der Leyen said officials are working on more sanctions on Russia.

U.S. equity futures:

  • S&P 500 Futures: -30 @ 4,299
  • DJIA Futures: -269 @ 33,351
  • Nasdaq 100 Futures: -108 @ 13,730

Overseas:

  • Europe: DAX -1.3%, FTSE -0.6%, CAC -0.9%
  • Asia: Nikkei -2.9%, Hang Seng -3.9%, Shanghai Composite -2.2%

Commodities:

  • Crude Oil +5.73 @ 121.41
  • Nat Gas +0083 @ 5.099
  • Gold +23.10 @ 1989.70
  • Silver +0.186 @ 25.975
  • Copper +0.0495 @ 4.9870
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