Everybody Loves A Bargain | The Daily Peel | 3/4/22

Yesterday, everyone hated tech stocks. Markets were largely mixed for most of the day. However, the selloff in tech overwhelmed other sectors given the dominance in market cap the sector commands. This led the Nasdaq to tumble 1.56%, while the other indexes held up a little better. The S&P fell 0.53% while the Dow dropped a mere 0.29%.

Let's get into it.

• Wow, Russian businessman puts a $1mn bounty on Putin's arrest
• "Uninvestable" Russian stocks are getting delisted from MSCI & FTSE
• Credit Suisse makes maybe the worst decision ever trying to save itself from Russia exposure
• Russian planes banned from U.S. airspace
• LMAO Russia is literally banning loan payments to foreigners holding ruble-denominated bonds
• Snowflake drops $800mn to make app development easier
• Schwab is going BIG in crypto                             

Disapproving for Approval - President Joey B is a little self-conscious about his approval rating. Sitting at 41%, the exact same as Donnie T was at this point in their respective presidencies, this does not bode well for midterm szn.

Still, the percentage of Americans that approve of Biden has ticked up in recent days. War is a great way to rally a country together as there is perhaps no stronger force for unification than a common enemy. Joe's refusal to allow any more "malarkey" from Mr. Putin has worked out so far. 

But as this fresh war in Europe continues to rage, the scarcely-united American voice could get a lot quieter… or louder, I guess, like when your parents yell at you for all those missing homework assignments. 

Now, experts are beginning to assess the financial impact sanctions will have back at home. Spoiler alert: it doesn't look good.

Already, the added friction in the global financial system has been the root of increasing commodity costs. Oil, for one, is obviously the headliner. (Brent is at $111.67 at the time of writing). Companies like Apple, Ford, Dell, and Exxon pulling products from the Russian market and supply chain constraints will likely translate to further price increases. Hopefully, these are temporary, but only time will tell. 

In an attempt to manage skyrocketing prices of the most concerning costs to U.S. consumers - oil - the Biden administration yesterday signaled disapproval of a bipartisan plan to ban all imports of Russian oil and gas. As the world's third-largest oil producer (behind the U.S. and Saudi Arabia), this move would obviously spike prices even higher… if that's possible.

While no decision has been made final, the White House continues to reiterate that really anything is on the table. Either way, oil went negative in 2020, so nothing should surprise us anymore.

Bottom Feeding - Everybody loves a bargain. And right now, some investors are eyeing what they see as the bargain of a lifetime because Russian assets are dirt cheap.

From publicly traded stocks to privately owned yachts, everything and anything Russian is hella cheap. Just look at state-owned gas producer Gazprom's share price - the monopoly has absolutely cratered in recent sessions, closing yesterday at $1.10 on European OTC markets. That's a nearly 90% loss in just two weeks.

And it doesn't get any better at state-owned oil producer Rosneft. You may have heard about BP selling their $20bn stakes in the business, but there is absolutely no way another investor pays that for shares in the collapsing company. Shares are also down egregiously in the past few weeks.

But the real fun is in the private market. From yachts to soccer teams, the Russian elite is attempting to pad their wallets before things get any worse. PE shops and fellow absurdly rich people are circling these assets "like vultures," according to Bloomberg. While not many details are available for private market activity, it's a near certainty we will hear about something wild soon.

So what do you think, apes? Deal of a lifetime, or the greatest value trap ever? Place your bets now.