Welcome to 10 Things Before the Opening Bell.
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1. The Fed turns hawkish. The Federal Open Market Committee wrapped up its two-day meeting yesterday, signaling plans to accelerate the tapering of its bond purchases and setting the stage for three rate increases in 2022 starting in the spring.
Jerome Powell's Fed solidified a hawkish pivot that the market had been expecting. Since unemployment has fallen and inflation has climbed to a 40-year high, the US central bank adjusted its language in acknowledgement that inflation is less transitory than previously believed.
As the US economy recovers further from the pandemic, the policy path is meant to combat such a historic surge in costs, though there is still some belief the Fed will waver in the new year. Some analysts argue the Fed will bow to populist pressures and fail to raise rates fast enough, inflating a bubble in the stock market.
Here's what the Fed's is looking at as 2021 winds down:
- Data published Wednesday showed retail sales rose 0.3%, lower than the expected 0.8%, per Wednesday's Census Bureau data.
- Unemployment is expected to fall to 3.5% in 2022, below the long-run estimate of 4%.
- The virus is on the rise, with a seven-day average of over 120,000 new cases a day.
2. Global shares are pushing higher after the Fed. The central bank is sending the message that it will control inflation. Here's what the markets are doing.
3. Reddit has filed to go public. The cradle of the meme-stock trading frenzy plans to list in the US. And Wall Street Bets is already planning to make it the ultimate meme.
4. FTX founder Sam Bankman-Fried built a $25 billion crypto exchange with a relentless work ethic and boundless ambition. The 29-year-old gets by on four hours of sleep and multitasks on six screens. Here's what the crypto billionaire is really like.
5. Earnings on deck: Adobe, Accenture, and Rivian Automotive, all reporting.
6. Kevin Durant and Coinbase inked a new promotion deal. The NBA star's company Thirty Five Ventures deepened ties with the crypto exchange in a new multi-year agreement. Durant is now slated to become a prominent face of Coinbase.
7. Crypto traders on CoinMarketCap and Coinbase reaped huge gains momentarily. Both platforms inaccurately displayed sky-high bitcoin prices for a brief moment Tuesday, making some users believe they scored big. Tweets showed bitcoin's price at $887 billion.
8. The "FAAMG" trade is dead but Apple's appeal is still strong among retail buyers, according to a research firm. It's $90 billion share buyback arsenal is aiding the stock's gains, too. Here's how Apple has "defied all laws of gravity" on its way to a $3 trillion market valuation.
9. "Trillion Dollar Man" Dan Peña said the market is set for a 40% crash and new investors will get wrecked. He thinks that high margin debt and Fed policy are among the current risk factors. The ex-oil tycoon shared his tips for how investors should be positioned during a pullback.
10. Behavioral investing expert Phil Toews said the odds of a sell-off are growing. He recommends investors prepare for an environment where big declines are much more likely — and Toews doesn't think the Fed will rescue the stock market if it plunges.
Compiled by Phil Rosen. Feedback? Email [email protected] or tweet @philrosenn.
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