Goooood morning, Opening Bell crew. I'm Phil Rosen, and I'm extra chipper this morning — not because it's no longer Monday, but because Amazon Prime Day kicks off today. If soaring inflation has put you on the hunt for deals, you can scope out Insider's live updates here.
Now for the real reason we're all here — below, I break down how the world's biggest money manager isn't banking on an economic rebound, and why the Fed is to blame.
Plus, the dollar and euro hit parity for the first time in 20 years. When the pair was less than a penny away from a one-to-one equivalence, I stopped by the The Refresh from Insider to explain how the currencies reached this level.
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1. BlackRock says the Fed is probably going to snuff out an economic rebound. And that means market volatility is only going to continue, the firm warned Monday.
Policymakers are tackling inflation the wrong way by using rate hikes to address snags from production constraints, analysts wrote in their mid-year report, and more turmoil awaits.
"The Federal Reserve, for one, is likely to choke off the restart of economic activity — and only change course when the damage emerges," the report said. "The macro backdrop is no longer conducive for a sustained bull market in both stocks and bonds, we believe."
Instead of a period of steady growth and inflation, the analysts said the US is entering a brave new world of risk and uncertainty.
Goldman Sachs, too, doesn't seem keen on a stock rebound. Investors have weathered a big chunk of the bear market already, but indexes still have room to fall.
The bank's chief global equity strategist, Peter Oppenheimer, maintained that stocks haven't yet reached the full 30% decline that these types of bear markets typically bestow.
Tech stocks in particular still haven't found a bottom, Oppenheimer added, since their current valuations remain above their long-run averages.
In other news:
2. US stock futures fell early Tuesday, as price pressures, COVID outbreaks in China, and slowing economies around the globe stoke recession fears. Meanwhile, oil extended losses and bitcoin fell back below $20,000. Here are the latest market moves.
3. On the docket: PepsiCo Inc., HCL Technologies, and Burberry plc, all reporting.
4. Goldman Sachs analysts named a batch of stocks they like for their strong dividend growth and yields. Stocks are in a bear market right now and recession risks are on the rise. See the bank's 50 companies that show promise even as the market sees its worst start to a year in five decades.
5. Russia launched new chartered ships to trade commodities with China and India. Wartime sanctions imposed by the West have snagged typical supply chains, so Moscow's new cargo paths are intended to smooth things out for the countries to move commodities. Since war in Ukraine began, neither China nor India has condemned the invasion.
6. Charlie Munger personally backed an investor seeking to build the Berkshire Hathaway of Australia. And Warren Buffett's longtime business partner did so even though he rarely trusts anyone except the Oracle of Omaha with managing his money. Munger praised the investor's focus on fundamentals, rational mind, and high ethical standards.
7. Twitter's lawyers say Elon Musk's attempt to abandon his $44 billion takeover is "invalid and wrongful." In a letter to Musk's attorneys, Twitter's lawyers said backing out of the deal "constitutes a repudiation of their obligations under the agreement." Following Musk's efforts to pull out of the deal, Twitter shares fell 11.3% Monday, their biggest one-day drop in more than two months.
8. Two economists explained why these cities look significantly overvalued with house prices holding steady across the US. Both of the Florida-based experts said the market is going to calm down eventually, but warned that home costs are still too high in many places. They broke down their list of 13 cities.
9. These 13 stocks have the most dramatic upside right now. As equities are slowly recovering from their bear market plunge, certain names stand out, according to Goldman Sachs. Here's what analysts are eyeing — including eight stocks that could more than double in value over the next year.
10. The economy is showing signs that inflation may have peaked, but that doesn't mean things are going to get cheaper right away. The trend, known as disinflation, means prices will still broadly rise, just at a slower pace. Take a dive into the numbers.
Keep up with the latest markets news throughout your day by checking out The Refresh from Insider, a dynamic audio news brief from the Insider newsroom. Listen here.
Curated by Phil Rosen in New York. (Feedback or tips? Email [email protected] or tweet @philrosenn).
Edited by Max Adams (@maxradams) in New York and Hallam Bullock (@hallam_bullock) in London.