Welcome to 10 Things Before the Opening Bell.
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1. Peak pandemic-era inflation? The Consumer Price Index surged 7% year-over-year in December, matching the average estimate but still marking the strongest pace of inflation since 1982.
The figure ticked up slightly from November's 6.8% gain, though economists expect inflation to cool as demand eases and supply chains heal. The gauge climbed 0.5% month-over-month, a slower rate than the 0.8% from the last reading, suggesting that some supply-demand imbalances may be normalizing.
High inflation usually correlates with a strong job market (and vice versa). That's not been the case during the pandemic. Labor participation hasn't rebounded even though prices have soared — a trend Fed Chair Jerome Powell said puts the US in an awkward spot.
The latest economic data says the disconnect remains. Here's Powell's plan of attack:
- The Fed will prioritize combating inflation over directly supporting employment, as the former could be "a severe threat" to the latter.
- Inflation forces businesses to slow their growth, curb hiring, and raise prices, all of which weaken the labor market.
- In forecasting rate hikes, Powell is arguing that inflation must come down to allow the labor market to fully heal.
2. US stocks are creeping higher as the red-hot inflation reading sinks in. The Nasdaq faces a struggle to hold onto its winning streak, as focus starts turning to big bank earnings Friday. Here are the latest moves on the market.
3. The CEO of an ETF firm says these metaverse and cybersecurity stocks are "category killers." Michael Loukas thinks these stocks could one day become the next Facebooks, Amazons, and Googles. He's bullish on Roblox, plus these three other picks.
4. Earnings on deck: Fast Retailing Co., Delta Air Lines, and Ichigo Inc., all reporting.
5. Ark Invest's flagship ETF has seen managed assets fall 50% from their peak. Investors are rotating away from high-growth stocks into value stocks, which has resulted in some holdings in Cathie Wood's fund to fall as much as 42%.
6. Crypto could get a boost after a new credit data deal. TransUnion and Spring Labs announced a partnership to put credit data on the public blockchain. In addition to accelerating DeFi adoption, the move will allow some investors to get lower borrowing rates or obtain loans without having to put up collateral.
7. Now worth $28 billion, Ken Griffin is the third-richest person in finance. After Griffin sold a stake in Citadel to Sequoia and Paradigm, his net worth surged by $6.5 billion. The deal catapulted him up the finance rich list — landing Griffin just behind the founders of Binance and Blackstone.
8. Solana's ease of use could help it take market share away from ethereum. With a market cap of $47 billion, Solana is currently the fifth largest crypto. But thanks to its lower transaction fees, Bank of America said Solana could "become the Visa of the digital asset ecosystem."
9. Bank of America is eyeing these high-returning ETFs to beat out a sluggish and risky bond market. Investors can put their money into specific bond ETFs for better-than-average returns, said the bank. Here's its nine names to look out for — plus one theme that has returned 400% over 20 years.
10. Wave Financial's Les Borsai invested in two NFT collections that have soared by 450% and 70% in two weeks. Borsai, who was an early investor in Bored Ape Yacht Club and CryptoPunks, is now looking toward another under-the-radar collection that he likes for its nostalgic value.
Compiled by Phil Rosen. Feedback? Email [email protected] or tweet @philrosenn.
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