10 Things You Need To Know Before The Opening Bell

Good morning! Here's what you need to know:

Russian Sanctions. The Obama administration announced another round of sanctions on Russia in response to ongoing tensions on the Ukrainian border. "The sanctions are targeted at a series of large banks and energy and defense firms, marking a significant escalation in the U.S.'s standoff with Russia," reported BI's Brett Logiurato. "Up to this point, the sanctions had only been aimed at several Russian individuals and their businesses involved in the destabilization of the situation in Ukraine. Among the targeted firms on the new sanctions list include Rosneft, the world's largest oil company; Gazprombank, Russia's largest private bank; Novatek, Russia's largest independent natural-gas producer; and Vnesheconombank, a development lender."

Russia Gets Slammed. Russia's MICEX stock market index is down over 2.7% and Russia's ruble is down 1.1% against the dollar. "From the West's perspective they could not have chosen a better time to intensify sanctions," said Societe Generale strategist Regis Chatellier. "Until a few weeks back Russia was in a position of relative strength because there was massive pressure on oil but that is not the case any more."

But Will The Sanctions Work?. While the sanctions may do damage on Russia's economy, they may not be able to get Russia to back off from the border. Here's a quote from a paper written by Robert Pape: "The key reason that sanctions fail is that modern states are not fragile. Nationalism often makes states and societies willing to endure considerable punishment rather than abandon their national interests. States involved in coercive disputed often accept high costs, including civilian suffering, to achieve their objectives. …Even in the weakest and most fractured states, external pressure is more likely to enhance the nationalist legitimacy of rulers than to undermine it."

Markets Are Down. World stock markets are taking the sanctions in stride. Markets in Europe are down, with Britain's FTSE 100 down 0.3%, France's CAC 40 down 0.5%, and Germany's DAX down 0.4%. U.S. futures are also lower with Dow futures down 37 points and S&P futures down 7.6 points. In Asia, Japan's Nikkei and Hong Kong's Hang Seng closed essentially unchanged.

Historic Firings Coming To Microsoft. "Microsoft Corp is set to cut more than 6,000 jobs in an announcement expected early Thursday, according to sources familiar with the matter, as it trims its newly acquired Nokia phone business and reshapes itself as a cloud-computing and mobile-friendly software company," reported Reuters' Ron Grover and Bill Rigby. "What could be the deepest job cuts in the company's 39-year history come five months into the tenure of Chief Executive Officer Satya Nadella, who outlined plans for a "leaner" business in a public memo to employees last week."

Meanwhile At Xbox. "Since the new Xbox One offering launched on June 9th, we've seen sales of Xbox One more than double in the US, compared to sales in May, and solid growth in Xbox 360 sales," said Microsoft's Xbox staff in a blog.

Job Market Update. At 8:30 a.m. ET, the Labor Department will publish its latest weekly report on unemployment insurance claims. Economists estimate weekly initial claims ticked up 310,000 from 304,000 a week ago. "Initial jobless claims continue to linger below 320k," noted Nomura economists. "This suggests that layoffs have bottomed out and also corroborates the strong payroll growth and declines in the unemployment rate we've seen this year."

Housing Market Update. At 8:30 a.m. ET, we'll also get the July report on housing starts and building permits. Economists estimate starts increased by 2.4% in June with building permits jumping 3.1%. "Building permits have trended higher and are running above the pace of starts," noted BofA Merrill Lynch economists."Moreover, homebuilder sentiment, as measured by the NAHB housing index, picked up over the month. New home sales also surged in May, which should incentivize greater building. After a rough start to the year, we think housing conditions have improved."

East Cost Update. The Philly Fed Business Outlook report will be published at 10:00 a.m. ET. Economists estimate the Philly Fed index fell to 16.0 in July from 17.8 in June. "The index has rebounded sharply after posting a decline in February on winter-related softness, and while we continue to expect broad-based improvement in manufacturing, we look for more moderating gains," said Barclays economists.

Here Come Q2 Earnings... Among today's big earnings announcements are Morgan Stanley ($0.56 estimated), Sherwin-Williams ($2.93), Google ($6.25), and IBM ($4.31)