Hey everyone me kevin here: okay, we just got a really good news and there are three bits of bad news, though, that we've got to pay attention to, though the good news is absolutely by far going to outweigh the bad today, but the bad has some dates That we want to pay attention to so we'll talk about those in just a moment. So what's the big good news? Well, first there's an interfax report that came out suggesting that russia is beginning the drawdown of some of its troops back to military bases, something that putin has been saying he would do all along raising some eyebrows about the white house's adire warnings over the last few Days to evacuate ukraine immediately, the shutting of their embassy in ikea and so on and so forth. The white house has certainly been playing quite a bit of uh fear-mongering, though some say that this exact fear-mongering uh is in this sort of escalation of seriousness, was just a negotiation strategy to help get putin to bend and to essentially call his bluff. Now i i always thought that sounded kind of weird, because it's like wait, if you think he's bluffing, why would you pull people out? I think it was more a negotiation, a strategy of we think you're serious.

We think you're going to do this. We're pulling everyone out we're ready with the sanctions. This is what's going to happen. We're going to do this.

We're going to do this, we're going to send troops over here we're going to strengthen nato, and i think that's actually what ended up potentially contributing to some of this, though, of course folks are going to argue for days in terms of how this negotiation played out, But here's what matters the drawdown is not a complete drawdown of troops. It's only a drawdown of some troops, which was alluded to yesterday when vladimir putin said alright in response to a plan to return some troops which markets did rally on yesterday. Of course, markets did u-turn a little bit towards the end of the day yesterday, because then there were renewed fears about these remarks that were made in ukraine, which was later called sarcasm and just more confusion about, what's actually happening between ukraine and russia. But the bottom line here is we're hearing that troops are already loading equipment onto trucks and trains and now, in the meantime, military troops are still in other areas scheduled to conduct drills uh on land and sea.

But this does take some of that escalated pressure and some of that imminent threat of an invasion away. We kind of we're going in the opposite direction: right, we're bottomed out now we're inflecting away from this war; fear which is really really good. Uh, remember this. This comes after 130, 000 troops have been on standby, with tanks, rockets, uh blood ready to go, and the white house suggesting there's probably gon na, be an artillery attack first, followed by a full-scale land invasion.

Anyway, uh look uh there there. This is all really really good news and obviously we're seeing a rally here in risk assets now something to note about bitcoin, which i remember i like to use ftx so check out ftx. If you have not yet use the link it down below to sign up for ftx, but something that i've been tracking here is yesterday we had a little pop off of that 42 000 level, and we ran right up over here to about 43 6.. What's incredible, though, is we actually rallied more before the news about this sort of russian drawdown then, once the news of the russian drawdown came out also when it comes to oil, we're seeing oil relax a little bit very, very good, especially since this removes inflationary pressures.

There's a lot of fear being priced into the market that omg what if oil goes to a hundred dollars or to 120, then what are we gon na have to do well? Well, then, we're gon na have higher costs for utilities, electricity, uh freight costs, shipping costs input costs, that's all going to be an inflationary pressure, especially for manufacturers, but also for individuals living at home and and so seeing a draw down of a brent and wti crude Down about a two and a half to three percent is is a very, very good thing for inflationary pressures, we're also seeing gold pull back a little bit about eight tenths of a percent uh. Obviously, we saw bitcoin move up we're seeing the nasdaq move up more. So uh than the other indices, this makes sense. You get a little bit of a reversal back to risk from safety.

Now we do have a few dangers that come with this one of the reversals that we see when people leave safe haven assets is, we see people start temporarily selling bonds when they sell bonds yields go up, so the 10-year treasury yield spiked a little bit. We're back to 2.04 and now, if people are no longer using bonds as sort of a flight to safety, or i should say no longer because that'll always be the case, people will always use bonds to some degree as a flight to safety in cash park. Now it's entirely possible that we see a little bit more selling pressure than what we have been seeing along the talk of the the uh ukraine issue, uh and and if more people sell bonds, more institutions sell bonds. We could see yields go back to that course of steadily rising now.

The most important thing to watch for, though, isn't just the 10-year rising, it's actually the following. Thanks bloomberg for the chart right here, it's the yield curve and you can see on the news this morning. We've actually hit bottom and started inflecting up now, we've seen a lot of gyrations in the yield curve. So we really want to see this corroborate to the upside, especially if this yield curve rotates back up to, let's say 60 basis points without coming back down to 40 or even if we briefly bounce back off of 40 kind of like a technical analysis, would look For and then we get a little bit of a run back towards that 60 direction.

I personally believe that would be critical, a a critical indication of fears of a recession starting to wane, because remember the more this line that i just showed you goes to zero. The more the market is pricing in fears of a recession, and this chart has been flattening substantially. Look at it again, flattening means going to zero. Zero is right here, where my mouse is.

We last hit this level back in 2019. This is just a one year. Chart right here so anyway, the fact that we're bouncing up very, very, very good sign. We want to see more of that, though russia is not our only risk, and even though it is a big risk, it is not our only risk.

I'm going to talk more about that big risk in just a moment, but i do want to briefly mention this in terms of a date for russia, the olympics and on february 20th, which many folks, especially uh, the white house, have suggested. Oh, no, don't worry. Russia won't necessarily wait till the end of the olympics to invade a lot of folks have wondered: why would they do that? Why would they even bother waiting to the end of the olympics and the reason is: why does it matter, because folks, russia and china have really close ties in fact, they're trying to strengthen their ties together to separate or take away power from the united states? Well, if china and russia are friends and the olympics are being held in beijing and xi and putin our buddies, why would putin hurt xin ping if the beijing olympics are still going on? That is not necessarily a good thing for relations. This does mean that when the olympics end on the 20th that it is possible, if putin does not get what he ultimately wants, we could see a re-escalation of tensions with ukraine.

Now, right now it looks like we have at least somewhat of a win for ukraine. We have a reaffirmation of sovereignty of ukraine by much of the world. We have a nato's strength that has just been reaffirmed by much of the world. We had a lot of diplomacy, building between canada, france, germany and the united states and the united kingdom and, of course, ukraine.

So much so much so that if anything, some folks are believing that western powers have actually gotten stronger through this exercise and gotten stronger by calling putin's bluff. Now so one one danger to watch is uh treasury yields rising and hopefully us bouncing off on that yield curve. The second danger is the 20th and the end of the olympics and the third danger. This, in my opinion, is probably one of the biggest dangers between now and well uh, the beginning of march, beginning to middle of march, when we start getting things like the labor report on the fourth, the cpi report on the 10th, the uh fed's fomc meeting on The 15th and 16th - the big thing in my opinion, coming up, actually has to do with the fomc meeting minutes now.

This is these are the notes from january. We already know that powell told us things in his mind, have gotten worse uh from december to january. Well, tomorrow, we're going to get those minutes and the minutes are not only what freaked me out about the market in january, but are also what freaked out a lot of people and those minutes come out tomorrow. So we'll want to pay attention to those to see.

Just how aggressive the fed is talking about getting uh beyond what they've already told us so we'll see, but those fomc minutes come out tomorrow at 11 a.m. California time now! In the meantime, we also uh i'm going we're going to be paying attention to the broader good news here, uh and the more we get affirmation that troops are being withdrawn from the border of ukraine. The better - and i do believe that this is probably going to lead to at least a short-term rally in risk assets, unless, of course, we get some form of renewed bad news on the big boogie man, and that is inflation because remember even war in ukraine. Uh was was consistently believed to be a more worldwide inflationary threat, with oil expected to potentially run to 120 to 150 a barrel which is wild, uh and massively inflationary.

So now that that pressure is gone, hopefully we can start seeing some relaxation all right folks fingers crossed. Thank you so much for watching and we'll see you in the next one.