Sanctions against Russia went from 0 to 100 at lightning speed. It started with sanctions against individuals, then against interests, but the machine went into overdrive over the weekend and is taking everything in its stride. A dozen of large companies have also frozen their activities in Russia. Some are even leaving their past investments at great expense, like BP Plc and Shell. All sectors of society are affected, as sports federations have started to exclude Russian teams from international competitions, Walt Disney and Sony will no longer release their films in the country, while Russian stocks are likely to be excluded from stock market indices. Even Switzerland has fallen in line by abandoning its secular neutrality, and Monaco has joined the European sanctions packages.

We are facing an unprecedented crisis that will probably have more economic repercussions than the market initially expected, including on supply chains and logistics costs. In a world already unbalanced by the consequences of the pandemic, it is illusory to think that an additional and unexpected source of disorder will not be felt.

All three Wall Street indexes are down this morning, and investors remain on edge.

 

Economic highlights of the day

The final manufacturing PMI indicators for February are being released throughout the day, as well as the U.S. manufacturing ISM. China reported a manufacturing PMI back in the expansion zone in February, at 50.2 points versus 49.8 points expected for the official indicator and 50.4 versus 49.1 expected for the Caixin PMI. 

The dollar is trading at EUR 0.8964. Gold is stable at USD 1921 per ounce. Oil is bouncing back to USD 104.4 a barrel of Brent and USD 102.0 a barrel of WTI. The T-Bond is yielding 1.85% over 10 years (+3 points). Bitcoin is sharply up to USD 43,798.

 

On markets:

* Citigroup: shares fell 1.6 percent in premarket trading, the biggest drop among Wall Street's major banks, as the yield on 10-year U.S. Treasuries fell to 1.7565 percent, its lowest level since Jan. 3.

* Chevron - The oil company announced plans Tuesday to raise its share buyback program to between $5 billion and $10 billion a year, while operating cash flow is expected to rise 10% a year through 2026. The stock is up 1.6% in pre-market trading.

* Alphabet, Meta Platforms - Both U.S. groups face sanctions in Russia as of Tuesday under a decree signed by Vladimir Putin that requires platforms with more than 500,000 daily users to open local offices in the country.

* Visa, Mastercard - The U.S. payment card specialists announced their intention to exclude several Russian financial institutions from their network in accordance with the sanctions imposed on Russia after the invasion of Ukraine.

* Walt Disney, AT&T - Hollywood studios, including Disney and Warner Bros, announced Monday a suspension of theatrical releases of their upcoming films in Russia in response to the Russian invasion of Ukraine.

* Uber Technologies announced Monday the resignation with immediate effect of three executives on the board of its joint venture with Russia's Yandex as part of Western sanctions.

* Roku - The streaming platform will remove the application of the Russian channel RT from its online stores in Europe, a source close to the matter said Monday.

* The Federal Trade Commission (FTC) is considering a possible lawsuit over Amazon's $8.5 billion takeover of MGM Studios, The Information reported Monday, citing sources close to the matter.

* Target - The U.S. retailer jumped 15 percent in premarket trading after the group issued a better-than-expected full-year profit and revenue forecast.

* Zoom Video Communications on Monday issued a full-year revenue and profit forecast below Wall Street expectations. The stock is down 3.7% in pre-market trading.

* Baidu - The Chinese internet search engine reported Tuesday a quarterly revenue above Wall Street expectations on the back of strong growth in its cloud and artificial intelligence businesses. The stock is up 3.3% in pre-market trading.

* Lucid - The electric vehicle maker announced Monday a downward revision of its production forecast for this year, citing "extraordinary supply chain and logistics challenges." The stock plunges 12.5% in pre-market trading.

* Workday advanced 6.9% in premarket trading after the company reported better-than-expected fourth-quarter sales.

* Johnson & Johnson - The U.S. Food and Drug Administration on Monday gave the green light to Carvykti/Cilta-cel, a cell therapy used in diseases affecting white blood cells, which was developed by the U.S. laboratory in partnership with the Chinese Legend Biotech.

* CTI Biopharma - The company announced Monday that the U.S. Food and Drug Administration has approved its treatment for adults with bone marrow cancer. CTI Biopharma's stock is up 30% in pre-market trading.

 

Analyst recommendations:

  • Ameriprise: Piper Sandler downgrades to neutral from overweight. PT up 8.4% to $325.
  • BAE Systems: Jefferies remains Buy with target raised from GBp 695 to GBp 875.
  • Berkshire Hathaway: UBS adjusts class b shares' price target to $364 from $354, maintains buy rating.
  • Coinbase Global: JPMorgan again lowers the price target to $296 from $345, maintains overweight rating
  • First Horizon: Raymond James downgrades to market perform from outperform.
  • Foot Locker: B Riley Securities lowers PT to $34 from $64. Maintains neutral rating.
  • International Consolidated Airlines: Bernstein upgrades from Neutral to Outperform targeting GBp 200.
  • ITM Power: J.P. Morgan upgrades from neutral to overweight targeting GBp 470.
  • Jack Henry: Oppenheimer upgrades to outperform from market perform. PT up 17% to $206.
  • JPMorgan Chase: Goldman Sachs adjusts the price target to $178 from $180, maintains buy rating
  • Lennox: Morgan Stanley upgrades to equal-weight from underweight. PT up 1.5% to $271.
  • Lincoln National: Goldman Sachs downgrades to neutral from buy. PT up 9.8% to $74.
  • Lockheed Martin: UBS adjusts price target to $465 from $425, maintains buy rating.
  • Ocado: Berenberg remains Buy with a target reduced from GBp 1990 to GBp 1800.
  • PG&E: Mizuho trims price target for pg&e to $16 from $17.50, maintains buy rating.
  • Quanta Services: B Riley Securities upgrades to buy from neutral. PT up 18% to $129.
  • Voya Financial: Piper Sandler downgrades to neutral from overweight. PT up 9.9% to $74.
  • Walmart: President Capital Management upgrades to buy from neutral. PT up 14% to $154.