Yesterday's synopsis:

• Major US equity indexes traded lower in choppy Thursday trading, finishing just off worst levels after a big bounce in prior session. Sectors mostly lower while growth trailed value factor by ~100 bp. Laggards include the mega-cap FANMAG (Facebook, Apple, Netflix, Microsoft, Amazon, Google), innovation, semis, expensive software and social media, apparel & accessories, apparel retailers, airlines, cruise lines, casual diners, casinos, hotels, OTAs, autos. Utilities, machinery, rails, parcel & logistics, waste, industrial metals, HPC, food, grocers, staples retailers, telecom and pharma distributors better performers. Treasuries narrowly mixed following a big backup in yields on Wednesday. Dollar firmer against the euro and sterling but a bit weaker on yen cross, while commodity currencies stronger again. Dollar index up over 1% this week. Gold finished up 0.7%. Bitcoin futures down 4.4%. WTI crude ended down 2.7%.

• Still a lot of moving pieces in focus. Bearish talking points revolve around heightened geopolitical uncertainty, aggressive and front-loaded Fed tightening cycle, QT, additional inflation pressure from commodity surge, negative corporate guidance trends. Bullish talking points revolve around oversold conditions and depressed positioning and sentiment indicators, a sharp decline in real yields, economic normalization with improved Covid trends, heightened likelihood of 25 bp liftoff in March (vs 50 bp) and strong corporate (buybacks, M&A, capex) and consumer (~$2.5T in excess savings) balance sheets.

• Ukraine said did not get result hoped for in second round of talks with Russia but agreed to hold another round of talks. Also agreed on humanitarian and disaster relief mechanism that could feature a temporary ceasefire. Busy on the economic calendar. ISM services missed with big decline in new orders, contraction in employment and uptick prices paid and backlog. Reports noted Iran nuclear deal agreement may be close, a dynamic that could help with oil pressure.

This morning's synopsis:

• • S&P equity futures are selling off many points below Thursday's close, amidst negative sessions in Europe and Asia overnight.

  • Geopolitics still the big overhang on global risk sentiment. Russian forces seized the Zaporizhzhia nuclear power plant in Ukraine, the biggest in Europe, where a fire broke out earlier in the day from shelling, but now fire has been controlled. Reports also discussed how Russia has stepped up its military offensive in southern Ukraine and launching attacks on residential areas. Putin said the operation is going according to plan and there seemed to be more doubt that he is looking for an offramp despite losing the information war and the severity of Western sanctions. Reports continue to highlight the accompanying rally in commodities, supply chain pressures and corporate exodus from Russia. Also some focus on dollar funding stresses.

  • February employment report out this morning. Street looking for a 400K increase in nonfarm payrolls following a 467K gain in January. Unemployment rate expected to decline 0.1pp to 3.9%. AHE, which is again expected to get the bulk of the attention, seen up 0.5% m/m and 5.8% y/y. Previews highlighted boost from Omicron fade and noted report should continue to play into the tight labor market theme. Not expected to be a major directional driver for stocks with the outsized focus on inflation and Powell this week essentially committing to a 25 bp raise at the March FOMC meeting.

Stock-specific news:

• Rivian (RIVN) recently announced they will have to raise the price of their trucks by 20% because of commodity costs. A lot of pre-order customers have already cancelled because they feel like they were tricked. Those customers could be turning over to Ford, although Ford probably wouldn't need new customers because Ford is sold out! Very unprofessional from Rivian, and good for Ford. Rivian's valuation was $130B around Thanksgiving last year, we were outspoken about how outrageous that was; more than halved now.