10 things before the opening bell
Good morning. More and more signs are pointing to a Russian default, but Russia doesn't seem to agree that's the case. Plus, Fed Chair Powell signaled that more aggressive moves from the central bank could be looming.
Let's break it down.
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Shamil Zhumatov/Reuters
1. Russia is facing a looming debt crisis. And Goldman Sachs weighed in on the dilemma, lowering the country's sovereign risk score — meaning the bank thinks the country is less likely to pay its debts.
"In our view, this reflects the technical nature of Russia's debt servicing issues, which we think are far-removed from the underlying credit dynamics," analysts said. But the Wall Street bank also pointed out that the war is damaging Russia's credit fundamentals, but would otherwise have a stronger rating.
Moscow, meanwhile, tried to reassure the market. On Thursday, Russia's central bank governor said the country isn't at risk of defaulting on its debt. The Kremlin, Elvira Nabiullina explained, has all the "necessary financial resources" to avoid it.
But earlier this week, a top industry watchdog deemed Russia's attempt to pay for two of its dollar bonds using rubles a potential default scenario. Plus, Russia's second-biggest bank, VTB, took a huge step toward default Wednesday by paying holders of its dollar bonds in rubles.
The lender was set to pay $52 million of interest payments on dollar-denominated bonds, but failed to do so. The bank said it had no choice, as it has been "completely cut off from foreign payment infrastructure in US dollars."
Kent Nishimura / Los Angeles Times via Getty Images
In other news:
2. Global shares are falling following hawkish comments from the Fed. Treasury yields jumped and stocks reversed much of the gains they made from strong corporate earnings. Here's what's happening across the markets.
3. Earnings on deck: Verizon, American Express, and Volvo, all reporting.
4. Jefferies said an immediate recession is unlikely, and that certain stocks will be set up for gains. As households and corporations brim with more cash than ever, the firm's chief economist doesn't anticipate a downturn until 2024 at the earliest. Here are 37 stocks to buy now.
5. Four market experts analyzed what comes next for Netflix. Shares of the streaming platform continue to plummet even though it was a pioneer in the space for years. See why one researcher said the stock still has 33% more downside.
6. Fed Chair Powell said a double-sized rate hike is "on the table" in May. The central bank could up the pace from a 0.25-percentage-point raise and do a 0.5-point hike instead. That would make mortgages, car loans, and credit-card interest even pricier.
7. Foreign investors sold a record $18 billion of Chinese debt last month. Surging yields made US bonds more attractive, as 10-year and 30-year debt have both hit multiyear highs. Here's what you want to know.
8. Crypto exchange Binance is limiting services in Russia. The move comes as the company aims to comply with EU sanctions tied to the Ukraine war. "We believe all other major exchanges must follow the same rules soon," the firm's CEO said.
9. The head of research at an $800 million crypto asset manager breaks down how she conducts due diligence on tokens before picking winning bets. Arca's Katie Talati leads a team of analysts to pair fundamental analysis with VC-style investing. She also laid out her bullish case for three DeFi tokens with long-term potential.
Andy Kiersz/Insider
10. The US is building more homes than it has in 16 years. Housing starts rose to an annual rate of 1.79 million in March, according to new data from the Commerce Department. The reading signals home supply could rebound soon after hitting historic lows through the pandemic.
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Curated by Phil Rosen in New York. (Feedback or tips? Email prosen@insider.com or tweet @philrosenn.)
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