Stock Market Futures Fall On News Of Potential Bans On Russian Oil Imports
U.S. stock futures are well in the red at the start of the new trading week. This appears to be the case as markets react to the latest development on the Ukraine-Russia war front. In essence, mentions of banning Russian oil imports across the U.S. and Europe are arising. As you can imagine this would also lead to rising oil prices (more on that later). Aside from the geopolitical factors at play, investors also have plenty of economic data to consider this week.
Most notably, the Bureau of Labor Statistics is set to release its monthly Consumer Price Index (CPI) reading on Thursday. This will likely be among the core focuses for investors this week. Accordingly, consensus economists are already expecting the CPI to come in at a 7.9% year-over-year jump. Should this be the case, it would translate to a 40-year high for inflation on this front. Aside from international conflicts and economic prints, investors also have another batch of earnings to digest in the week ahead. As of 6:27 a.m. ET, the Dow, S&P 500, and Nasdaq futures are trading lower by 1.44%, 1.48%, and 1.64% respectively.
Oil Prices Continue Surging Beyond The $125 Per Barrel Mark On Possible Russian Oil Ban
As the fighting between Russia and Ukraine intensifies, so too is the increasing pressure from countries worldwide against Russia. Namely, oil prices continue to skyrocket as the prospect of relying on Russian oil supplies dwindles. At the same time, there are ongoing discussions between the U.S. and Europe to ban imports of oil from Russia.
Because of all this, as mentioned earlier, oil prices are soaring. Entering the new week, both Brent crude and U.S. West Texas Intermediate (WTI) crude futures are trading up to highs last seen in 2008. To point out, WTI crude futures gained by over 6% to $123 a barrel after briefly hitting $130. Additionally, Brent crude futures rose to about $126. This is after it hit an overnight high of $139 at one point. Even with the current round of sanctions on Russia, the country’s energy trade remains mostly unaffected. However, according to analysts at JPMorgan (NYSE: JPM), Russia is having trouble finding buyers for 66% of its oil now. This comes as most potential buyers avoid Russia overall in response to the ongoing invasion in Ukraine.
On the national level, this hike in gas prices seems to be increasingly apparent as well. Over the weekend, according to the American Automobile Association’s estimates, the national average for a gallon of gas is at $4.009. Similar to Brent crude and WTI crude, this marks a first since 2008. To resolve this, talks of pausing the federal gas tax are now popping up.
Occidental Petroleum In Focus After Berkshire Hathaway Announces New $5 Billion Stake
Speaking of oil, Occidental Petroleum (NYSE: OXY) could be among the standout names in the bunch now. For the most part, OXY stock is already riding the oil supply shortage tailwind now. Year-to-date, the company’s shares are currently up by over 80%. Even with its current momentum, Occidental could continue to outpace its industry peers thanks to a positive piece of news. Notably, Warren Buffett’s Berkshire Hathaway (NYSE: BRK.A) disclosed a $5 billion position in Occidental. This information comes from an official SEC filing made by the firm over the weekend.
Now, the firm currently owns 91.2 million common shares of the oil firm, or about 9%. The likes of which are currently worth over $5.1 billion at its closing of $56.15 last week. Moreover, Berkshire Hathaway also owns 84 million shares in stock warrants, alongside 100,000 preferred shares in Occidental. After adding all of this up, the total comes to about 175 million shares. In particular, the preferred shares were courtesy of Berkshire Hathaway providing $10 billion to Occidental during its acquisition of Anadarko Petroleum back in 2019.
Overall, there seem to be plenty of reasons for investors to be tuning in to OXY stock right now. This could be the case with legendary value investor Warren Buffett seemingly taking an interest in the company. Also, firms such as JPMorgan are noting that oil could soar to $185 per barrel should Russia’s self-sanctioning continue. With all this buzz in the energy industry, I could see OXY stock having more room to run moving forward.
AT&T On A Roll As ‘The Batman’ Sees Solid Opening Weekend; Receives Bullish Upgrade From Morgan Stanley
In other news, AT&T (NYSE: T) could be worth looking at following the premiere of its latest blockbuster ‘The Batman’. Diving in, the nearly 3-hour movie raked in a whopping $128.5 million at box offices over the weekend. To highlight, this places it as the second-highest domestic pandemic-era opening. Also, The Batman is the second film to boast opening weekend sales of over $100 million over the same period. With this coming in above the AT&T-owned Warner Bros. studios’ expectations, investors could be looking at T stock now.
For one thing, this trend would continue to support the narrative of there being immense demand for films based on popular comic book characters. Evidently, The Batman’s current performance echoes that of Disney (NYSE: DIS) and Sony’s (NYSE: SONY) Spider-Man: No Way Home. Sure, the latter had a staggering $260 million opening weekend back in December. However, it is important to note that The Batman caters to more mature audiences with its PG-13 rating.
Movie success aside, analysts also seem to be bullish on T stock as well. Just last week, Morgan Stanley (NYSE: MS) analyst Simon Flannery highlighted certain growth catalysts to consider for T stock now. The largest of which would be AT&T’s ongoing deal with Discovery (NASDAQ: DISCA) to spin-off its WarnerMedia subsidiary. According to Flannery, this could bolster AT&T’s top-line growth sustainability and free cash flow. Now, Morgan Stanley currently has T stock on an Overweight rating and a price target of $28. As such, investors may want to keep an eye on T stock at this week’s opening bell.
Ryan Cohen Reveals Nearly 10% Stake In Bed, Bath & Beyond; Suggests Strategic Review
Billionaire investor Ryan Cohen, the co-founder of Chewy (NYSE: CHWY) and GameStop (NYSE: GME) chairman is making headlines now. This is thanks to news of Cohen taking a sizable stake in Bed, Bath, & Beyond (NASDAQ: BBBY). According to an official letter from Cohen to the BBBY board, his investment firm RC Ventures now has a 9.8% stake in BBBY. To begin with, BBBY stock has not been having the best of times in the stock market.
Over the past year, the company’s shares are currently looking at losses of about 47%. This is well below the performance of the S&P 500’s gains of over 13%. In hopes of turning things around, Cohen had a few notes for the company. In his letter, he states, “We believe Bed Bath needs to narrow its focus to fortify operations and maintain the right inventory mix to meet demand, while simultaneously exploring strategic alternatives that include separating buybuy Baby, Inc. (“BABY”) and a full sale of the company.” With all this talk of a potential sale, I could see BBBY stock turning heads in the stock market today.