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March 8, 2022
Higher inflation has been rough on us all.
We’ve seen it in oil, natural gas, and food prices.
Unfortunately, it could get worse.
All with oil well above $110, and the very real possibility of $300 a barrel.
We wish that was a typo. But according to a recent Reuters report, “Western countries could face oil prices of over $300 per barrel and the possible closure of the main Russia-Germany gas pipeline if governments follow through on threats to cut energy supplies from Russia.”
Not helping, the U.S. is getting set to ban Russian oil, natural gas, and coal without European participation as early as today. “Given Russia’s key role in global energy supply, the global economy could soon be faced with one of the largest energy supply shocks ever,” Goldman Sachs said, as quoted by CNBC.
While the news is likely to damage the economy, and most stocks, it’s thrusting green energy stocks into the spotlight. Solar names like First Solar and Sunrun are soaring. Fuel cell stocks, like Bloom Energy are surging. And oil stocks, like Exxon and Chevron should gush higher.
It’s also forcing shoppers to load up on staples, as the food fallout from the war spreads.
In fact, according to Time:
“The war has already driven wheat prices 70% higher in Chicago this year and is threatening to upend global food trade. Russia and Ukraine are vital suppliers of grains, vegetable oil and fertilizers, which means that supply disruptions will be felt all over the world. Wheat prices have surpassed levels last seen during the 2008 global food crisis—which helped spark widespread protests—and a United Nations index of food prices hit a record in February.”
One way to trade higher staples is with the Consumer Staples Select SPDR Fund (XLP).
While things could get worse, don’t panic.
Stay calm. Don’t exit the markets. Sit tight and remember that markets are resilient. They’ve come back from worse events in history.
The Dow is up about 64 points to 32,846
The S&P 500 is up about eight points to 4,206.15
The NASDAQ is down about 18 points to 13,303
Gold prices are up another $13.96 to $2,012.69
Bitcoin is down slightly to $38,702.15
Oil prices are up another $2.40 to $122.30
The VIX is up another 3.46 points to 35.44
Insider Buying – Dillard’s Inc. (DDS)
Keep an eye on DDS.
Dillard’s director Warren Stephens just paid out $4.6 million for 20,000 shares in late February 2022. He paid an average price of $230.51 per share.
In addition, according to TheFly.com, the company reported Q4 revenue of $2.11 billion, as compared to expectations for $2.05 billion.
CEO William Dillard, II stated, “We ended FY21 on a very strong note with a fourth consecutive record quarter. Our fiscal year net income of $41.88 per share exceeds any annual performance in our history. Importantly, during the year, we returned $866M to our shareholders through dividends and share buyback, while still ending the year with $717M in cash.”
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