Welcome to 10 Things Before the Opening Bell.
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1. A wild ride for stocks. Major indexes staged a massive comeback from session lows on Monday following the S&P 500's brief dip into correction territory.
The Nasdaq Composite ended higher after being down as much as 5% intraday. The Dow, down at one point by 1,115 points, ended in the green. Monday's plunge and subsequent comeback came as investors await the Federal Open Market Committee's first meeting of the year this Wednesday, with investors watching nervously for signs of a more aggressive Fed.
Index futures are down between 0.4 and 1.4% in Europe so far today, suggesting another drop at the opening bell later.
Morgan Stanley's equities guru, Michael Wilson, says winter is here for the stock market, telling investors to stop focusing on the Fed and start playing defense as the economic growth diminishes. The slowdown is bottoming but "it has quite a bit further to go," said Wilson.
Meanwhile, Fairlead's Katie Stockton is warning that while the Nasdaq could bounce back from its dip, investors shouldn't buy the bounce. Instead, she recommends using any comeback from the sell-off to reduce equity exposure.
The stock market's fear gauge spiked 30% during Monday's session to the highest point in more than a year. Between the Fed meeting, market rotations, and big tech earnings due this week, tensions are high on Wall Street.
2. The White House is set to release an executive order on cryptocurrencies. Federal agencies are being tasked with assessing the risks and opportunities that digital assets pose. The report could arrive as early as February.
3. Commodities are defying the crash in tech stocks and crypto as one of the "best hedges on value pricing." Here's why Wall Street experts think the outperformance is set to continue — and four ways you can get in on the action.
4. Earnings on deck: Tesla, Johnson & Johnson, Visa and Verizon all reporting.
5. Warren Buffett has nearly caught up with Cathie Wood after the tech-stock guru outperformed him in 2020. Berkshire Hathaway stock has climbed 31%, while Ark Innovation ETF has risen 36%. Wood's flagship ETF has faced pressure as investors shed growth stocks ahead of interest-rate hikes.
6. Adopt a barbell strategy and buy these two areas of the stock market, Jefferies global stock head says. Cyclical and growth stocks are good investments for times of financial repression, according to the strategist. He also recommended two hedges investors should load up on.
7. New York City mayor Eric Adams said his bitcoin investment is meant to send a message. "We're going to see a large amount of new technology in the city of New York," he said. Adams' comments came as bitcoin and other cryptos took big losses.
8. Don't buy the dip yet in high-growth stocks. That's according to a money manager at Morgan Stanley. The bottom isn't here yet — he says investors should wait for "seller exhaustion"
9. Millennium has quietly minted billions off of America's passive-investing craze. The hedge fund has found success wagering on shifts in stock indexes, and it's become the "greatest show on Earth" for savvy investors. Here's the inside story.
10. An investment chief laid out three ways to avoid "stupid expensive" US stocks. As historically lofty valuations start to crumble, Meb Faber of Cambria Investment Management shared where to put your money amid the volatility. Plus, he explained how to capitalize on the biggest opportunity in foreign stocks in 40 years.
Compiled by Phil Rosen. Feedback? Email [email protected] or tweet @philrosenn.
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