10 things before the opening bell
Happy Friday, readers. Today we're diving into a few rather bleak outlooks on the economy and the market. Then, you can see why more than half of oil executives blame shareholders — not the government — for limits on crude production.
Let's get into it.
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Brendan McDermid/Reuters
1. The chips are stacked against the market and the economy. A chorus of experts have voiced concern over what the coming months may hold. Notably, Wells Fargo's head of macro strategy predicts a 50% chance of a recession in 2023 thanks to a range of factors from inflation to spiking mortgage rates to geopolitical conflict.
"There's not really a great path for the Fed to try and limit recession risk, as far as going big, going early, going 50 basis points in May…I don't know if it really changes the ultimate question of how you calibrate all these issues that are coming together," the strategist told CNBC Thursday.
And while the pandemic showed the stock market can soar even as the economy falters, it probably won't be that way this time around. Barclay's on Thursday became the latest bank to slash its S&P 500 forecast for the year, and said reduced consumer spending on goods will hamper earnings growth.
With the COVID-19 pandemic waning, spending on goods will slow down and fiscal stimulus will run out, the Barclays analysts wrote.
Even after lowering its target, the bank still called its prediction overly optimistic.
Oleg Elkov/Gety Images
In other news:
2. Stock futures and oil are ticking lower. Investors are weighing up the possible outcome of US/European talks this week, including what to do about Russia's energy exports. Here's what's happening on the markets.
3. Earnings on deck: Farmers Edge, Lifeist Wellness, and BRP Inc, all reporting.
4. Bank of America broke down the good, the bad, and the ugly for its commodities outlook. As conflict rages on in Ukraine, the need to hedge against inflation has heightened. BofA offered three price scenarios for oil, gas, and metals to keep top of mind right now.
5. Chinese and European markets have seen a massive capital exodus since Russia invaded Ukraine. "Outflows from China on the scale and intensity we are seeing are unprecedented," the Institute of International Finance said in a report. Dig into the data to see why investors are shedding their positions.
6. Prices of fertilizer — the backbone of the global food supply — are skyrocketing. Western sanctions have stalled the world's biggest exporter, and a fertilizer shortage could mean food prices may continue to rise. Notably, this could mean more intense food insecurity for the world's poorest nations.
7. The White House said the reopening of Moscow's Stock exchange was a "charade." A top US official slammed Russia's exchange as "not a real market," following its reopening after a month-long pause. Nonetheless, Russian billionaires saw their wealth jump on the first day of trading since Ukraine was invaded.
8. These stocks have been deemed "out of consensus" but Bank of America said they offer strong upside. Analysts at BofA say the market is underestimating this specific basket of stocks in terms of financial performance — and said they could be in store for a 34% average price rise.
9. The CEO of a $15 million crypto hedge fund shared his three-part investing strategy. Part of Indigo's Thomas Puech's approach includes researching listed tokens, DeFi protocols, and metaverse projects. With his breakdown, he also gave three altcoins he's bullish on.
Dallas Fed
10. Oil executives said shareholder influence rather than government policy is the primary reason US crude producers aren't ramping up production. A Dallas Fed survey showed 59% of execs from 132 firms reported that investors put pressure on companies to maintain capital discipline. Here's what else the survey revealed.
Curated by Phil Rosen in New York. (Feedback or tips? Email prosen@insider.com or tweet @philrosenn.)
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