After Hours Summary: GME +15.8% jumps on plans for stock split; BLND -15.6%, DCT -11.3%, BB -4.6% fall on earnings; SPRO -25.3% falls on FDA newsAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: HYMC +5.2%, PL +4.5%, NCNO +2.7% (also WFC will expand use of nCino Bank OS to accelerate its digital transformation), ASTS +2.2%, INDI +2%
Companies trading higher in after hours in reaction to news: GME +15.8% (to seek approval for 3.33-for-1 stock split), LEV +5.6% (receives purchase order for 30 school buses), GTHX +2% (reports results of real world study of trilaciclib), XSPA +1.8% (stock offering), HLX +1.7% (enters into new contract with Shell Offshore to provide well intervention services), RETA +1.7% (completes rolling submission of NDA for omaveloxolone for Friedreich's ataxia), FSR +1.4% (passes 40,000 initial reservations for Fisker Ocean SUV), PPGH +1.1% (receives shareholder approval for combination with Gogoro), MEC +0.9% (CEO to retire), HOOD +0.6% (nearing launch of retirement account support on its platform, according to Bloomberg), AMZN +0.5% (union vote fails in Alabama, according to CNBC), RTX +0.4% (awarded $650 mln Navy contract), RNGR +0.3% (stock offering)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: RDW -26.9%, BLND -15.6%, DCT -11.3%, BB -4.6%, WEJO -2.7%
Companies trading lower in after hours in reaction to news: SPRO -25.3% (FDA identifies deficiencies in Spero's NDA for tebipenem), SLS -23.7% (signs license agreement with GenFleet Therapeutics for GFH009; also stock offering), IIPR -5.6% (commences public offering of 1 mln shares), ALE -5.2% (commences public offering of 2.95 mln shares), OLN -3.4% (forms blue water joint venture with Mitsui), GRIN -1.1% (CEO to retire), REV -0.5% (files for $75 mln mixed securities shelf offering), LMT -0.1% (awarded $3.2 bln Army contract and $1.3 bln Missile Defense Agency contract modification)
Chabad’s Ukraine Mission
The story of the Jews plays an outsize role in the country’s history and present.
History has been a battleground between Russia and Ukraine for years, and the story of the Jews has been part of that fight. This can be heard today in Vladimir Putin’s rhetoric about “de-Nazification” or Ukrainian President Volodymyr Zelensky’s exhortations, amid Russian bombing, to remember Babyn Yar’s murdered Jews. But the past is more than a backdrop for geopolitical maneuvering.
The founding of the Hasidic movement by Rabbi Israel Baal Shem Tov (1698-1760) in what is today western Ukraine revolutionized Jewish life. And Rabbi Menachem M. Schneerson—the Rebbe, or the seventh leader of the Chabad-Lubavitch movement—was born in Ukraine 120 years ago and later helped spark Judaism’s post-Holocaust religious revival.
The Rebbe was born in Mykolaiv on April 18, 1902, to Rabbi Levi Yitzchak and Chana Schneerson. His maternal forefathers had been the city’s chief rabbis since 1854. During a 1905 pogrom, his mother hid in a cellar with other women, whose children’s terrified screams risked attracting the anti-Semitic marauders outside. Years later, she would recall her 3-year-old son soothing the other children.
In 1908 Levi Yitzchak Schneerson was elected chief rabbi of what is now Dnipro. There the future Rebbe celebrated his bar mitzvah while helping his parents care for Jewish World War I refugees forcibly expelled from the Russian Empire’s western provinces. But Czarist persecution paled in comparison with the destruction of Jewish religious and communal life under communism.
The Soviets closed synagogues and yeshivas, forcing rabbis out of their positions. The Chabad-Lubavitch Hasidim paid a heavy price to resist this oppression—with many sent to the gulags or executed. The Rebbe’s father played a key role in the resistance, openly urging Jews to remain steadfast in their faith. He was arrested by the secret police in 1939, tortured and exiled to Kazakhstan.
The Rebbe later wrote that “those who withstood and survived the horrific torrent of intimidation” had something in common: “They had internalized Hasidic teachings, and the enthusiasm and self-sacrifice that they evoke, through proper education.” For decades the Rebbe’s work to strengthen Jewish life and learning behind the Iron Curtain was clandestine, and he maintained an underground educational and aid network stretching throughout the Soviet Union.
A new era began as the Soviet Union was falling apart. In 1990 the Rebbe began sending permanent emissary couples to resuscitate Jewish life in Ukraine. A year later, Ukraine’s KGB issued a public admission that it had framed and tortured the Rebbe’s father, causing his death in 1944.
Even with the Soviets gone, it wasn’t easy to be a proud and visible Jew in Ukraine. But this changed over the ensuing decades: 192 Chabad husband-and-wife teams put down roots in 32 cities throughout the country, building synagogues, schools and social-service centers. Giant Hanukkah menorahs illuminating public squares signaled that the days of hiding one’s Jewishness were over. While the Schneerson name had been reviled, the new Ukraine embraced it. In 2016, Mykolaiv and Dnipro renamed streets for the Rebbe.
Since the Russian invasion, this flourishing Jewish community has been upended, but it hasn’t disappeared. The communal structure built to nurture Jewish life in Ukraine pivoted into an effort to save its Jews, together with other innocent civilians, from the destruction wreaked by the war.
Across the country Chabad has been distributing food and medications and turning synagogue basements into bomb shelters. Dnipro’s 20-story Chabad center has become a frenetic base of humanitarian aid for refugees, both Jewish and not, as they are helped out of the country. Chabads of battle-scarred places like Mariupol and Sumy continue to evacuate people to safety. The organization has helped more than 35,000 people escape and will continue doing so as long as there are people in need.
On March 2 Avraham Wolff, Odessa’s chief rabbi and Chabad representative, sent some 120 children and staff from his community’s children’s home to Berlin. Once they arrived, Rabbi Wolff and his wife followed with another 140 women and children. After settling them in, the rabbi drove back to Odessa alone. At the Palanca border crossing, he was the only one heading into Ukraine.
“Everything I absorbed from the Rebbe’s Torah teachings and example during my 52 years—how nothing is more important or dear to God than helping someone materially or spiritually—was for these last weeks,” Rabbi Wolff told me recently.
The Rebbe taught that true education should charge us with a sense of responsibility to our fellow man and to God. It is no accident that today these values are being put into action by the Jewish communities he revived and inspired. Nor that this great modern Jewish sage was born 120 years ago in Ukraine—a country that, in working to overcome its past, has emerged as an example of moral courage and fortitude for the world.
Top Banking Regulator Calls for Caution as Risk Landscape Worsens
The chance of tail risks—unlikely but highly impactful risk events—has increased with the war in Ukraine, said Acting U.S. Comptroller of the Currency Michael Hsu
Banks face a more uncertain environment amid the war in Ukraine and need to shore up their risk management programs to gird against multiple negative scenarios unfolding at once, a top U.S. banking regulator said.
So-called tail risks—unlikely but highly impactful risk events—are a growing potential issue that financial institutions’ risk departments need to grapple with, Michael Hsu, acting comptroller of the currency, said Thursday at a conference hosted by the American Bankers Association.
“Russia’s invasion of Ukraine has affected tail risk as well as geopolitics,” Mr. Hsu said. “Greater caution and risk management vigilance is warranted today, perhaps more than any time in recent memory.”
The recent invasion has increased the risk of a broader conflict emerging, but it also has direct impacts on cyber and inflation risks, Mr. Hsu said.
Banks’ risk managers should update their scenario planning to consider the possibility of multiple tail risks emerging simultaneously and should ensure their stress-testing remains up-to-date, Mr. Hsu said.
He encouraged financial institutions to empower their risk managers to use their judgment, and advised boards and executives to pay attention to those managers’ assessments.
“Strong, independent risk management can help the banking system successfully navigate these risks and avoid surprises,” Mr. Hsu said.
The stress-testing required by the Dodd-Frank Act means large banks should be able to weather many shocks, but they should be wary of complacency and overconfidence, he said.
Apart from the war in Ukraine, growing cryptocurrency trading also poses serious risks, particularly in how institutions account for their crypto holdings, Mr. Hsu said. Supposedly hedged positions have a long history of “blowing up,” he said.
Mr. Hsu said he had engaged in collaboration with U.S. federal authorities and with their U.K. counterparts to maintain a “consistent, careful and cautious” approach to bank involvement in crypto.
Closing Stock Market SummaryThe S&P 500 fell 1.6% on Thursday, slumping into the close on no specific news catalyst. The Nasdaq Composite (-1.5%) and Dow Jones Industrial Average (-1.6%) fell comparably while the Russell 2000 fell 1.0%.
The weak finish pushed all 11 S&P 500 sectors into the red on a closing basis, with the financials (-2.3%) and communication services (-2.0%) sectors losing at least 2.0%. The utilities (-0.2%) and consumer staples (-0.4%) sectors outperformed on a relative basis with modest declines.
The session was influenced by profit-taking activity after a strong second half of March, quarter-end machinations, and a 7% drop in oil prices ($100.43, -7.24, -6.7%) after the White House laid out plans to release one million barrels of oil per day for the next six months to help alleviate gas prices.
On a related note, OPEC+ agreed to increase its output targets by 432,000 barrels per day in May, according to CNBC. That's slightly more than the 400,000-bpd schedule for April.
Inflation remained on the market's mind after PCE data for February rose in-line with expectations, further crimping real personal disposable income, which decreased 0.2% in February. On a year-over-year basis, the PCE Price Index was up 6.4% while the core PCE Price Index, which excludes food and energy, was up 5.4% -- its highest level since 1983.
The Treasury market didn't react to the inflation data, perhaps because it wasn't surprising or because investors preferred to hide out in bonds amid the negative bias in equities ahead of the employment report tomorrow. The tight spreads continued to weigh on the financials sector for profitability reasons.
The 2-yr yield decreased five basis points to 2.28%, and the 10-yr yield decreased three basis points to 2.33%. The U.S. Dollar Index rose 0.6% to 98.37. The CBOE Volatility Index increased 6.4% to 20.56.
Separately, Walgreens Boots Alliance (WBA 44.77, -2.69, -5.7%) fell 6% despite the Dow component beating top and bottom-line estimates while UiPath (PATH 21.59, -7.45, -25.7%) was the latest growth stock to take a plunge after providing disappointing guidance.
Reviewing Thursday's economic data:
- Personal income increased 0.5% month-over-month in February (consensus 0.5%), though real personal disposable income was down 0.2%. Personal spending increased 0.2% (consensus 0.5%) while the personal savings rate as a percentage of disposable income increased to 6.3% from a revised 6.1% (from 6.4%) in January. Real personal spending was down 0.4%. The PCE Price Index was up 0.6% (consensus 0.6%), pushing the year-over-year rate to 6.4% from 6.0%. The core PCE Price Index, which excludes food and energy, was up 0.4% (consensus 0.4%), pushing the year-over-year rate up to 5.4% from 5.2% in January.
- The key takeaway from the report is that inflation continues taking a bite out of wage gains, as real personal disposable income decreased 0.2% while the Core PCE Price Index rose to its highest level since 1983.
- Initial jobless claims for the week ending March 26, increased by 14,000 to 202,000 ( consensus 200,000), rising off their lowest level since September 1969. Continuing jobless claims for the week ending March 19 decreased by 35,000 to 1.307 million, a level not seen since December 27, 1969.
- The key takeaway from the report is that with claims hovering at levels not seen since late 1969/early 1970, the labor market remains tight, which can serve as a tailwind to already-high inflation.
- The Chicago PMI for March increased to 62.9 (consensus 56.8) from 56.3 in February.
Looking ahead, investors will receive the Employment Situation report for March, the ISM Manufacturing Index for March, and Construction Spending for February on Friday.
- Dow Jones Industrial Average -4.6% YTD
- S&P 500 -5.0% YTD
- Russell 2000 -7.8% YTD
- Nasdaq Composite -9.1% YTD
Microsoft acquires Minit to strengthen process mining capabilities
Today, Microsoft is announcing the acquisition of Minit, a leader in process mining technology that enables businesses to uncover opportunities for continuous process improvement and better operational efficiency.
Organizations across the globe are seeking to be more operationally resilient and accelerate their digital transformation plans. Seamless operations and ensuring that every component of each business process runs smoothly is critical, but most leaders are not able to understand the actual performance of their processes and end up making decisions based on subjective information. Gartner® notes that “Recent trends in automation and knowledge of the underlying processes and interactions are key to digital transformation.” *
Minit currently enables businesses to transform the way they analyze, monitor and optimize their processes. Minit’s solutions have helped businesses gain deep insights into how processes run, uncover root causes of operational challenges and help mitigate undesired process outcomes.
This acquisition will further empower Microsoft to help our customers digitally transform and drive operational excellence by creating a complete picture of their business processes, enabling every process to be easily and automatically analyzed and improved. Customers will be able to better understand their process data, uncover what operations look like in reality and drive process standardization and improvement across the entire organization to ensure compliance at every step.
Today’s announcement further signals Microsoft’s commitment to help organizations quickly discover and optimize their business processes by bringing data and execution together to unlock powerful insights. Learn more about getting started by visiting the Minit website.
For additional information about Microsoft process mining investments to date see our recent process advisor blog or the Process Advisor product page.
Read Minit’s announcement about the acquisition here.
*Gartner Market Guide for Process Mining, Marc Kerremans, Tushar Srivastava, Farhan Choudhary November 2021
GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved
U.S. Probes Meeting Between Activision CEO and Option Buyer
Authorities are looking into at least one meeting between CEO Bobby Kotick and one of three traders who made a timely options trade just before merger announcement
Authorities investigating timely trading in Activision Blizzard Inc. ATVI -0.16% securities are looking at at least one meeting between the videogame firm’s chief executive and one of three traders days before they placed a large bet on Activision shares, according to people familiar with the matter.
Activision CEO Bobby Kotick met with Alexander von Furstenberg in the week before Mr. von Furstenberg and media moguls Barry Diller and David Geffen bought options to purchase Activision shares at $40 each on Jan. 14. The options trade, which has generated an unrealized profit of about $59 million, was arranged days before Activision agreed to be acquired for $95 a share by Microsoft Corp. , The Wall Street Journal has reported.
The Justice Department is investigating whether the options trade violated insider-trading laws, the people familiar with the matter said. The Securities and Exchange Commission is separately conducting a civil insider-trading investigation, the people said.
Mr. Diller previously told the Journal in an interview that none of the men had material nonpublic information about the Microsoft-Activision deal. He confirmed they had been contacted by regulators.
“We had zero knowledge of that transaction and it belies credulity to think that if we did we would have proceeded,” Mr. Diller wrote Thursday in an email to the Journal. “It’s equally unlikely to believe Mr. Kotick, a sophisticated professional, in a social breakfast with Mr. von Furstenberg and his wife would have told them of the pending transaction.”
Mr. von Furstenberg disclosed his breakfast meeting with Mr. Kotick to law-enforcement authorities who interviewed him about the trade, according to a person familiar with the matter. Messrs. von Furstenberg and Geffen haven’t responded to the Journal’s requests for comment.
Alex von Furstenberg disclosed his meeting with Mr. Kotick to law-enforcement authorities who interviewed him about the trade, according to a person familiar with the matter.
PHOTO: DREW ANGERER/GETTY IMAGES
Mr. Kotick’s status in the investigation couldn’t be learned. He hasn’t been interviewed by law-enforcement authorities, some of the people said. An Activision spokesman declined to comment. The Justice Department declined to comment. The SEC didn’t immediately respond to a request seeking comment.
The meeting between Messrs. von Furstenberg and Kotick adds to the growing regulatory pressure on Activision and Mr. Kotick personally. The SEC is separately investigating Mr. Kotick and other Activision executives over how they handled workplace misconduct allegations, the Journal has reported, citing documents and people familiar with the investigation. That probe, along with an investigation led by the California Department of Fair Employment and Housing, has escalated since the Microsoft deal was announced. Activision has said it is cooperating with the SEC probe and has called a recent move by the California state agency to subpoena police records “an extraordinary fishing expedition.”
Mr. Kotick and Activision have been under intense scrutiny from employees, investors and regulators since a July lawsuit from the California state agency that alleged a culture of sexual harassment and gender pay disparity. Soon after the Journal reported in November that Mr. Kotick knew of some sexual harassment claims and didn’t report them to Activision’s board of directors, Microsoft reached out about a possible deal, the Journal has reported. Mr. Kotick has said he has been transparent with his board of directors, and Activision has called the Journal’s reporting “misleading.”
On Wednesday, a federal judge approved an $18 million settlement between Activision and the Equal Employment Opportunity Commission, which has been investigating Activision since 2018.
Experts said regulatory investigations are unlikely to derail the deal with Microsoft unless there is a so-called material adverse change that would affect the value of the deal, which is expected to close sometime next year. Mr. Kotick isn’t expected to remain at Microsoft, people familiar with the matter said.
Microsoft is required to pay Activision a breakup fee of about $3 billion after April 18, 2023, if Microsoft walks away from the deal, securities filings show. If Activision abandons the deal, it must pay about $2.3 billion.
Barry Diller has said that none of the men had any material nonpublic information about the Microsoft-Activision deal ahead of the options trade.
PHOTO: NIKKI RITCHER FOR THE WALL STREE
Mr. von Furstenberg arranged the options trade through JPMorgan Chase & Co. for himself and Messrs. Diller and Geffen, according to some of the people familiar with the matter. Mr. Geffen believed Activision was undervalued and would be acquired or taken private, and first contacted Mr. Diller with the idea for the trade, according to Mr. Diller.
“It’s a simple situation and a simple coincidence, which took place over 2 business days,” Mr. Diller wrote in the email. “All the information and records we are giving to the investigators will support that. I did not wait until I was 80 to participate in so obvious a fraud.”
Mr. von Furstenberg is Mr. Diller’s stepson, and Messrs. Diller and Geffen are longtime friends. Mr. Kotick is a longtime friend of Messrs. Diller and von Furstenberg, according to people familiar with their relationship.
Activision shares were around $63 at the time of the trade, meaning the options already were profitable to exercise, or “in the money.” Options holders stood to reap more if Activision’s stock price rose.
Mr. von Furstenberg is the founder and chief investment officer of Ranger Global Advisors LLC, a company that manages his family’s fortune, according to his LinkedIn profile and Ranger’s website. The firm manages more than $1 billion, the website says. An officer of Ranger Global Advisors declined to comment.
Call options give a trader the right to buy shares at a specific price by a certain date. The three men have yet to exercise the options, which don’t expire until early next year, the people said.
Traders using options are often looking to profit from a swing in share prices. Because options typically cost less than shares, they can amplify gains when traders bet right, particularly when they purchased options that were “out of the money”—the term for bets that aren’t profitable at the time the options are purchased. Options that are “in the money” at purchase tend to be more expensive and less risky because they can be immediately profitable to exercise.
The traders appear to have spent around $108 million to acquire the right to buy 4.12 million Activision shares, the people said. Those options if exercised today would be worth around $167 million, based on recent trading prices.
The value of the options would rise further if the deal closes at the stated per-share price of $95, which Microsoft has said is expected after midyear, compared with Activision stock’s Wednesday closing price of $80.36. If the men hold the options through a closing at that price, their profit stands to surpass $100 million, the people said.
Obi-Wan Kenobi’s premiere will be two days late, but you’ll get two episodes at once
Disney’s highly anticipated Obi-Wan Kenobi Disney Plus series will now debut two days later than previously planned, but there will be two episodes available to watch instead of just one. The new schedule means you’ll be able to watch the show starting Friday, May 27th.
The company announced the news on Thursday with a video featuring Obi-Wan Kenobi star Ewan McGregor. Disney first introduced Wednesday debuts with Loki in 2021 (also with a video, though this one featuring star Tom Hiddleston), and that move was apparently successful enough that the company soon moved the release dates for all of its original series to Wednesdays. Despite the shift for Obi-Wan Kenobi’s premiere, subsequent episodes will still debut on Wednesdays, Disney says.
Obi-Wan Kenobi begins 10 years after the events of Star Wars: Revenge of the Sith, in which Anakin Skywalker completed his transformation into Darth Vader. Hayden Christensen is back to reprise his role as Vader, which I cannot wait for — the potential for memes is great. Disney debuted the first teaser for Obi-Wan Kenobi earlier this month, and if you’re a Star Wars prequel trilogy stan like I am, it’s likely to send some nostalgic chills down your spine.
FACEBOOK’S ALGORITHM WAS MISTAKENLY ELEVATING HARMFUL CONTENT FOR THE LAST SIX MONTHS
The social network touts downranking as a way to thwart problematic content, but what happens when that system breaks?
A group of Facebook engineers identified a “massive ranking failure” that exposed as much as half of all News Feed views to “integrity risks” over the past six months, according to an internal report on the incident obtained by The Verge.
The engineers first noticed the issue last October, when a sudden surge of misinformation began flowing through the News Feed, notes the report, which was shared inside the company last week. Instead of suppressing dubious posts reviewed by the company’s network of outside fact-checkers, the News Feed was instead giving the posts distribution, spiking views by as much as 30 percent globally. Unable to find the root cause, the engineers watched the surge subside a few weeks later and then flare up repeatedly until the ranking issue was fixed on March 11th.
In addition to posts flagged by fact-checkers, the internal investigation found that, during the bug period, Facebook’s systems failed to properly demote nudity, violence, and even Russian state media the social network recently pledged to stop recommending in response to the country’s invasion of Ukraine. The issue was internally designated a level-one SEV, or Severe Engineering Vulnerability — a label reserved for the company’s worst technical crises, like Russia’s ongoing block of Facebook and Instagram.
THE TECHNICAL ISSUE WAS FIRST INTRODUCED IN 2019 BUT DIDN’T CREATE A NOTICEABLE IMPACT UNTIL OCTOBER 2021
Meta spokesperson Joe Osborne confirmed the incident in a statement to The Verge, saying the company “detected inconsistencies in downranking on five separate occasions, which correlated with small, temporary increases to internal metrics.” The internal documents said the technical issue was first introduced in 2019 but didn’t create a noticeable impact until October 2021. “We traced the root cause to a software bug and applied needed fixes,” said Osborne, adding that the bug “has not had any meaningful, long-term impact on our metrics.”
For years, Facebook has touted downranking as a way to improve the quality of the News Feed and has steadily expanded the kinds of content that its automated system acts on. Downranking has been used in response to wars and controversial political stories, sparking concerns of shadow banning and calls for legislation. Despite its increasing importance, Facebook has yet to open up about its impact on what people see and, as this incident shows, what happens when the system goes awry.
In 2018, CEO Mark Zuckerberg explained that downranking fights the impulse people have to inherently engage with “more sensationalist and provocative” content. “Our research suggests that no matter where we draw the lines for what is allowed, as a piece of content gets close to that line, people will engage with it more on average — even when they tell us afterwards they don’t like the content,” he wrote in a Facebook post at the time.
Downranking not only suppresses what Facebook calls “borderline” content that comes close to violating its rules but also content its AI systems suspect as violating but needs further human review. The company published a high-level list of what it demotes last September but hasn’t peeled back how exactly demotion impacts distribution of affected content. Officials have told me they hope to shed more light on how demotions work but have concern that doing so would help adversaries game the system.
In the meantime, Facebook’s leaders regularly brag about how their AI systems are getting better each year at proactively detecting content like hate speech, placing greater importance on the technology as a way to moderate at scale. Last year, Facebook said it would start downranking all political content in the News Feed — part of CEO Mark Zuckerberg’s push to return the Facebook app back to its more lighthearted roots.
I’ve seen no indication that there was malicious intent behind this recent ranking bug that impacted up to half of News Feed views over a period of months, and thankfully, it didn’t break Facebook’s other moderation tools. But the incident shows why more transparency is needed in internet platforms and the algorithms they use, according to Sahar Massachi, a former member of Facebook’s Civic Integrity team.
“In a large complex system like this, bugs are inevitable and understandable,” Massachi, who is now co-founder of the nonprofit Integrity Institute, told The Verge. “But what happens when a powerful social platform has one of these accidental faults? How would we even know? We need real transparency to build a sustainable system of accountability, so we can help them catch these problems quickly.”
Putin Signs Decree Ordering Gas Exports To Be Halted If Buyers Don't Pay In Rubles
Contrary to expectations that Vladimir Putin was bluffing about collecting rubles in exchange for Russian energy exports, moments ago a decree signed by the Russian president confirmed that that was not the case.
According to Bloomberg, Putin said he had signed a decree demanding payment in rubles for Russian gas supplies, which is set to begin April 1 as previously reported. According to the decree, while Russia will continue to supply gas at set volumes and prices, it will demand that buyers of gas open accounts in Russian banks, and warned that Moscow can halt gas contracts if buyers don't pay in rubles; additionally, new proceedings in EUR or USD could be blocked. Pushing what many viewed as a bluff to the edge, Putin said that active contracts will be halted if demands are not met, and explained that the move is meant to increase settlements in national currencies.
Putin's decree follows an earlier report in the Russian press that Gazprom was studying options of halting gas supplies to Europe amid RUB payment issues. It also follows comments from the Kremlin which suggested that it would look into the idea from lawmakers to ask other nations to pay for a wider range of Russia exports in rubles.
Indicating Russia's operational readiness to follow through with the plan, Interfax adds that Putin has ordered for special accounts for gas payments to be opened at Gazprombank which will sell gas FX on a Moscow exchange.
In kneejerk response to the news, US nat gas prices spiked - perhaps in anticipation that much of US output will now be LNG-ed over to Europe, potentially creating a US shortage in due course...
... while oil also rose from session lows following the latest SPR release jawboning which has yet to be confirmed by the White House.
Finally, now that it appears the ruble will have to be purchased by western powers, the currency has completed its roundtrip to pre-invasion levels.
