Marketbites: Union Pacific Leads Market Gains
Portfolio Manager Commentary:
Following the worst week of the year so far, stocks rose Monday as treasury yields eased. Higher treasury yields were part of the reason for last weeks selloff since traders could earn moderate gains without the added risk of equities. The S&P 500 got a nice boost from Union Pacific which climbed 10% after the company announced CEO Lance Fritz will step down this year. This move comes following a letter written by hedge fund Soroban Capital Partners to the Union Pacific board calling for a CEO change.
“Because of the renewed focus on hotter inflation and the implications for the Fed, rates are once again driving equities,” said Ross Mayfield, investment strategy analyst at Baird. “The rapid shift in Fed funds expectations and the spike in short-term yields has been risk-off in the stock market, so some reprieve on rates today will likely boost equities.”
Looking ahead this week, 6% of the S&P will report earnings this week. Several major retailers, restaurants, some travel and entertainment names as well as food companies are set to report. Target, Costco, Lowe’s and Macy’s are some of the big names posting earnings this week.
Chart of the Day:
A year of war in Ukraine is revitalizing U.S. oil exports as a source of financial influence and geopolitical power. Now that the West has shunned most Russian energy, record U.S. crude exports have helped fill the gap in Europe with the oil needed to provide gasoline, diesel, and jet fuel. Since February 2022, when Russia invaded Ukraine, average monthly seaborne cargoes to the continent jumped 38% compared with the previous 12-month period, according to ship-tracking firm Kpler. “America is back in the most predominant position it has been in world energy since the 1950s,” said Daniel Yergin, an energy historian and vice chairman of S& P Global. “U.S. energy now is becoming one of the foundations of European energy security.”