Markets were in a panic overnight as oil and commodities spiked sharply higher on the Russian-Ukraine crisis. However, before the open, there were headlines about Russian demands that were not nearly as unreasonable as previously. This is likely just more misdirection by Putin, but it helped the market to bounce as we await further news from the third round of negotiations that just started.
Breadth is running around 3 to 5 negative, but this chaotic action has created some major price dislocation, and there are some signs of stock picking. That can shift very fast due to the significant headline risk, but there are signs that the market is looking ahead to the next phase in this crisis.
The biggest hurdle for the market is that it just isn't very clear what happens after Ukraine. Ukraine has been a much tougher opponent than Putin anticipated, but there are no signs that Russia will relent. If they do eventually take control of Ukraine, Putin may have second thoughts about immediately going after other countries.
The market is working on discounting these uncertainties and is making some progress. We will continue to jump around on headlines, but the action this morning showed that there are very willing buyers on any positive news, no matter how questionable it might be.
I'm not doing anything too aggressive this morning, but I added to a position in Castor Maritime (CTRM) . This is a low-priced stock that is engaged in transporting personnel to and from bulk carrying ships. I also took a position in Safe Bulkers (SB) which is a bulk shipper. Grain shipments are going to be more important than ever in the months ahead, and demean for bulk shipping is going to stay very strong.
