Welcome to 10 Things Before the Opening Bell.
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1. Biden taps Fed Reserve Chair Powell for another term, but change is in the air. The president nominated Jerome Powell for a second term as head of the central bank, citing his "steady leadership during an unprecedented challenging period." Powell has been a highly dovish Fed chair, and has enjoyed bipartisan support for re-nomination, despite objections from progressives.
However, the status quo is about to change — Powell is going to have to tackle an entirely different economic landscape over the next four years.
During the pandemic, the Fed cut interest rates to historic lows, prioritized employment, and spent billions to keep the US economy afloat. For his next term, Powell will have to pivot toward combating inflation at the risk of choking off the cash flows that have helped markets soar to record highs.
Here's what to keep in mind as Powell eyes a second term:
- Inflation rose 6.2% year-over-year in October, the biggest jump in 30 years.
- The labor shortage is real: There are 0.7 workers for every job opening, a record low.
- The Fed has been buying at least $80 billion in Treasurys and $40 billion in mortgage-backed securities each month — and those numbers are set to taper.
2. US stock futures are on the back-foot this morning. With Powell's nomination, bond yields are well above last week's lows, which has hurt the tech sector. Take a look at what the market is doing.
3. The research director at a $14 billion asset manager is telling investors to focus on specific sectors to protect against inflation. David Grecsek expects inflation to run hot for months and isn't buying the "transitory" narrative. He thinks tech and energy are overrated, and shared which sectors he's betting on instead.
4. On the docket: Dollar Tree, HP, and Best Buy, all reporting earnings.
5. MoonPay soared to a $3.4 billion valuation after new funding round led by Tiger Global. The self-described Paypal for crypto raised $555 million in its latest round, and plans to use the investment to beef up headcount. Here's how it plans to democratize access to the crypto economy.
6. Fundstrat expects the S&P 500 to surpass 4,800 by year-end. Despite rising COVID-19 cases, supply chain disruptions, and tanking consumer confidence, the firm believes investors will overcome their worries: "We believe this resolves in equity upside."
7. Stocks could hit new heights this winter as a "Santa rally" takes shape. This year, buybacks and bullish retail traders could help equities surge. Here's why investors are optimistic going into the holiday season.
8. AMC execs led by CEO Adam Aron have cashed out $70 million worth of shares this year. Aron himself sold $25 million this month — though the bulk of the sales occurred during the theater chain's epic 2,000% rally earlier in 2021.
9. This blockchain startup mines $300,000 worth of bitcoin a day. Two PrimeBlock execs told Insider how they run their crypto mining operation — and also shared the four staking protocols retail investors are using to supercharge their returns.
10. Oppenheimer's chief investment strategist shared what stocks he's focused on in today's market environment. John Stoltzfus advocates for a "barbell portfolio" approach, and thinks investors should be buying both value and growth stocks. He broke down Oppenheimer's strategy — as well as four sectors to invest in right now.
Compiled by Phil Rosen. Feedback? Email [email protected] or tweet @philrosenn.
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