1. -- Stock Futures Slide As U.S. Warns of Russian Attack on Ukraine
U.S. equity futures slumped lower Monday, while Treasury bond prices jumped and oil re-asserted its recent seven-year highs, as investors heeded warnings from the White House that Russia could be preparing an invasion of Ukraine as early as this week.
President Joe Biden cautioned Russia President Vladimir Putin during a weekend phone call that the U.S. would take 'decisive' action against any military action in the Ukraine, while National Security Adviser Jake Sullivan said the U.S. would defend "every inch of NATO" in the even of a Russian invasion.
"We cannot perfectly predict the day, but we have now been saying for some time that we are in the window, and a major military action could begin by Russia in Ukraine any day now," Sullivan told CNN Sunday. "That includes this coming week, before the end of the Olympics."
The specter of military conflict on the European border, and the disruption of gas supplies to the Germany and elsewhere, lifted global oil prices past the $95 per barrel mark in overnight trading and triggered a retreat from risky assets into the safe-haven of the U.S. dollar and the Treasury bond market.
At the same time, investors are paring bets on a 50 basis point rate hike next month, and indeed on any Federal Reserve action prior to its scheduled meeting on March 15 to March 16, following the publication of a new $33.3 billion bond-buying schedule that lasts into early March, a move analysts see as incompatible with interest rate increases.
On Wall Street, futures tied to the Dow Jones Industrial Average are indicating a 250 point opening bell decline while those linked to the S&P 500 are priced for a 48 point retreat.
Nasdaq Composite futures are indicating a further 190 point slide for the tech-focused benchmark as 10-year Treasury note yields ease to 1.92% in overnight trading
2. -- Week Ahead: Retail Sales, Earnings in Focus
The strength of the U.S. consumer, and the impact of the fastest inflation in more than 40 years on retail spending, is likely to be the focus of this week's earnings and data releases with a holiday quarter update from Walmart WMT and January retail sales from the Commerce Department.
Retail sales are expected to grow 1.8% from last year when the data is published on Wednesday, according to Street forecasts, as spending rebounds from a difficult December period where sales fell 1.9%. Walmart's fourth quarter earnings follow on Thursday, with analysts looking for an adjusted bottom line of $1.50 per share on revenues of $151.8 billion.
Outside of Walmart, around 58 S&P 500 companies will report this week, including Hilton Worldwide (HLT), Marriot International (MAR), Viacom (VIAB) and Wynn Resorts (WYNN). With just over 70% of the benchmark reporting so far, collective S&P 500 profits are expected to grow 31% from last year to a share-weighted $461.5 billion.
3. -- Oil Prices Top $95 A Barrel On Russia Tensions, Supply Slump
Global oil prices scaled to a fresh seven-year peak in overnight trading, briefly changing hands at more than $95 per barrel, amid U.S. warnings of a near-term military conflict in the Ukraine.
Any disruption in European gas supplies from Russia, which flow through the Ukraine -- or which are affected by EU and US sanctions -- are likely to add further upward pressure on prices, with more analysts suggesting that $100 oil is likely in the coming weeks.
"It is pretty clear that developments related to Russia/Ukraine will be crucial for price direction in the short term, not just for oil but for broader commodity markets," said ING's head of commodities strategy Warren Patterson.
Here in the U.S., stockpiles fell to the lowest levels since October of 2018 last week, while drillers, eager to capitalize on the multi-year price peak, added the new rigs in the Gulf of Mexico in around three-and-a-half years.
WTI crude futures for March delivery, which are tightly linked to U.S. gas prices, were marked 21 cents higher from their Friday close at $93.31 per barrel in overnight trading. Brent contracts for April, the global benchmark, were last seen 11 cents higher at $94.57 per barrel.
4. -- Johnson & Johnson Set to Defend 'Texas Two Step' On Cancer Liabilities
Johnson & Johnson (JNJ) shares edged lower in pre-market trading as the healthcare giant prepares for a week of court testimony linked to its decision to put potentially billions of talc liabilities into a special company that immediately filed for bankruptcy.
Johnson & Johnson has said that the costs linked to defending 40,000 cases linked to allegations that its Baby Powder, and other talc-based products, contained cancer-causing asbestos, are close to $1 billion. Another $3.5 billion has been tied to previous verdicts and settlements.
The company put those claims into a company called LTL Management LLC, which filed for bankruptcy in North Carolina last year with $2.56 billion in talc liabilities, in an effort to negotiate a singular settlement instead of litigating the cases individually. The tactic is often called a "Texas Two Step", as it relies on laws from the state to keep the brand name out of the litigation headlines.
Should the court rule against it, Johnson & Johnson could face individual trials that could significantly raise its ultimate payout.
Johnson & Johnson shares were marked 0.4% lower in pre-market trading to indicate an opening bell price of $167.04 each.
5. -- Coinbase QR Code Ad Leads to Web Traffic "Throttle"
Coinbase Global (COIN) shares edged lower in pre-market trading after the cryptocurrency exchange suffered traffic congestion on its platform linked to a $13 million Super Bowl commercial.
Coinbase, which aired the 60-second spot during the second quarter of last night's 23-20 Super Bowl win by the Los Angeles Rams over the Cincinnati Bengals, was forced to "throttle" traffic to it website as users linked the bouncing QR code to their smartphones.
Once connected, users were enticed to received $15 in free bitcoin as well as a chance to win a further $3 million.
"(Coinbase) just saw more traffic than we've ever encountered, but our teams pulled together and only had to throttle traffic for a few minutes," chief product officer Surojit Chatterjee said through his verified Twitter account. "We are now back and ready for you at http://drops.coinbase.com. Humbled to have been witness to this."
Coinbase shares were marked 1.5% lower in pre-market trading to indicate an opening bell price of $191.60 each.
