Good morning readers. Phil Rosen here, reporting from New York.
Energy markets have responded accordingly following the EU’s partial Russian oil embargo. The past day has seen record prices, geopolitical happenings, and forecasts of crises on the horizon.
There’s a lot to unpack — let’s jump in.
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1. There’s a perfect storm for rising energy costs. The EU agreed to ban most Russian crude just as China made the call to ease COVID-19 restrictions — and oil prices hit a two-month high of $123.
Rising crude prices came alongside a surge at the pump. US gas prices hit a national average of $4.622 Tuesday, a new record high.
However, after soaring early on Tuesday, oil prices finished the day negative, after The Wall Street Journal reported that some producers are exploring the idea of suspending Russia’s participation in the OPEC+ production deal.
Energy stocks have been a clear winner amid the crunch. Energy companies have dominated the list of gainers in the S&P 500, as oil prices neared levels not seen since 2008.
Even as the benchmark index has struggled through 2022, energy stocks are notching multi-year highs on the back of a remarkable two-year surge.
In Europe, the continent’s benchmark price for power hit a fresh record as the new embargo set in. Markets are also pricing in gas cutoffs from Russia, which has been shutting off supplies to customers refusing to use rubles for transactions.
Meanwhile, the IEA chief warned of summer fuel shortages and a triple energy crisis — diesel, petrol, and kerosene —that could be worse than that of the 1970s.
In other news:
2. US stock futures were mixed early on Wednesday, amid concerns central-bank rate hikes may bring about a
3. On deck today: Weibo Corp, China Finance Online, and NetApp Inc, all reporting. Plus, look out for the ISM report on business manufacturing PMI at 9:00 am ET.
4. This CEO built a 70-person real estate brokerage firm, and he said he’s picked up business advice from a variety of books. Among them are stories of highly successful entrepreneurs. He explained why everyone should read biographies — and named his two favorite business books.
5. The number of corporate executives buying stock in their own company is at the highest level in more than two years. And some experts say that could potentially signal a market bottom. Here’s what you want to know.
6. Selling in the stock market is likely to take over again after last week’s rally, according to Fairlead’s Katie Stockton. With oil prices having approached their 2008 peaks, it’s not hard to imagine them trending higher over the summer months, Stockton explained, amid increases in travel demand and supply shocks from Russia. Here’s why she sees limited upside remaining in the market’s current relief rally.
7. Russia could impose negative interest rates on the dollar and euro deposits to elevate China’s yuan and other currencies. The country’s central bank said sanctions have already decreased the appeal of the two top currencies. At the same time, yuan-ruble trading surged more than 1,000% as Beijing and Moscow cozy up further amid tensions with the west.
8. The stock market’s plunge is ending and it’s time investors pick out companies that will outperform in the rally that follows, Evercore ISI said. Stocks have leaped roughly 6% in six days, and strategist Julian Emanuel said these 15 companies are set to post big gains in a sustained comeback. See his list here.
9. A $1.5 trillion asset manager dissects why bitcoin is “kryptonite” for institutional investors’ portfolios. Despite being bearish on bitcoin, Prudential’s investment wing thinks certain innovations are here to stay. Analysts identified four key areas to invest in now for long-term growth.
10. Meme-stock favorite AMC spiked, though the gains were short-lived. The movie chain’s CEO said the record opening for Top Gun drove a huge increase in attendance at theaters over the weekend. The stock was up as much as 10% before sinking again. “This is two-and-a-half times the biggest Tom Cruise [movie] opening ever,” CEO Adam Aron said.