Apple's Confirms First Product Reveal on March 8

MARKET MOVERS

• U.S., IEA agree to release 60 million barrels from oil stockpiles amid Ukraine turmoil. The move represents another coordinated effort to counter Russia. The U.S. and other IEA countries are hoping to bring down oil prices. Lower oil prices would reduce revenue for Russia, one of the world’s largest oil producers, and potentially give the U.S. and Europe more room to target Moscow’s energy industry.
  
  
• Wheat futures surge to a 14-year high on fears of war-driven supply shortages. Both Ukraine and Russia are large producers of wheat, accounting for around 30% of the world’s wheat exports, so this is one of the channels where the direct economic impact is acute. Shipping companies are no longer accepting orders for deliveries from or to Russia. And virtually no buyer is likely to be willing at present to order wheat from Russia.
  
  
• Ford is creating distinct EV and internal-combustion operating divisions inside the company. Ford is, essentially, trying to disrupt itself, by building a nimble new startup inside of a huge, global organization. Ford Blue will be the name of the internal combustion business. Ford Model e is the name of the EV business and will accelerate innovation and delivery of breakthrough electric vehicles at scale.
  
  
• Soaring fertilizer prices are about to increase the cost of food. Russia is a major supplier of every crop nutrient, and higher supermarket bills will be a ripple effect of its invasion of Ukraine. Pandemic-induced supply bottlenecks and the rising cost of natural gas, a key production input, are among the factors sending fertilizer prices soaring. If the global trade in fertilizer is further disrupted, it will mean more food inflation. Read more here.
  
  
• Foreign commercial investments up 49% in 2021. Foreign investors purchased an estimated $57.7 billion in U.S. commercial real estate in 2021, a nearly 50% jump from 2020, according to NAR. Investors targeted secondary markets such as Seattle, Atlanta, and Dallas, as the top destinations of foreign investors, NAR reports. The largest amount of capital flowing in came from Canada, followed by Singapore and South Korea.

• Fannie, Freddie offer $1.14B to boost affordable housing. The government-sponsored enterprises are offering their largest amount ever toward affordable housing, contributing $1.14 billion to the Housing Trust Fund and the Capital Magnet Fund. The mortgage financing giants are pledging to help increase affordable housing as they look to curb a nationwide housing shortage. Read more here.

WHAT TO WATCH

• Apple confirms plans for March 8 event. The company is expected to announce its first low-cost iPhone SE with 5G capabilities, a new iPad Air, and updated Macs with Apple-made chips. The event, promoted with the tagline “Peek performance,” will get underway at 10 a.m. Pacific time. The presentation will be streamed on Apple’s website. Apple plans to announce at least one new Mac as well, with more new machines coming around May or June and in the fall.
  
• Weak mortgage demand could get a big boost as the Ukraine crisis causes interest rates to drop sharply. Rates are now falling fast due to the Russian invasion of Ukraine. The war in Ukraine has caused investors to rush into the bond market, which resulted in lower yields. Mortgage rates loosely follow the yield on the U.S. 10-year Treasury. The average rate on the 30-year fixed fell 28 basis points in just the past two days. Read more here.
  
  
• Defense stocks may see a long-term lift as Russia’s actions spur a big jump in spending by U.S. allies. Bank of America expects defense spending to rise to at least 3.5% to 4% of U.S. gross domestic product on the paradigm shift. With geopolitical tensions likely to remain high, expect many countries (both inside & outside of NATO) to look to fortify their military capabilities and increase defense budgets on a secular basis. Read more here.

• Powell signals Fed will raise interest rates at March 16 meeting, despite uncertainties from the Russian invasion of Ukraine. With inflation well above 2% and a strong labor market, they expect it will be appropriate to raise the target range for the federal funds rate at the meeting later this month. Powell didn’t comment on the size of the planned rate hike. The Fed is expected to continue to raise rates throughout the year.