Gooood morning, readers. Phil Rosen here, coming to you from New York — and today we're breaking down how wildly oil prices could fluctuate, depending on what happens next.
Lots of moving parts today — let's get started.
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1. Oil prices could swing toward two extremes, BofA analysts said last week. Crude has already surged more than 40% since Russia invaded Ukraine in February, but a few key variables will dictate what happens next.
Analysts said Brent crude could average $102 per barrel in 2022 and 2023, but there's a chance it could go far above or below that base level.
Soaring inflation is pushing central banks to rapidly hike interest rates — which can hit commodities demand — and commentators are sounding the alarm on a recession.
Then, demand destruction could ensue.
Should a downturn hit, prices could slip all the way to about $75, the BofA analysts said.
Alternatively, however, European sanctions could slam Russian supplies and cause the opposite to happen. A potential supply shock and disappearing barrels from the major oil-hub could send crude prices to $150 a barrel.
The price hinges on how badly Russia's production is hit by sanctions — and G7 leaders are in talks over a price cap on Russian oil.
Meanwhile, oil shippers are hiding Russian cargoes by paying in Chinese yuan, exchanging weapons for crude, and "going dark," the Guardian reported.
In BofA's view, if Russian oil supply remains above 10 million barrels a day, prices would remain stable. If they dip below 9 million barrels a day, then prices could spike dramatically.
2. US stock futures rise early Tuesday, after China eased its Covid protocols, cooling concerns about global economic growth. Here are the latest market moves.
3. Sam Bankman-Fried's FTX crypto exchange is considering acquiring Robinhood, as per Bloomberg. Last month, Bankman-Fried disclosed a 7.6% stake in the brokerage firm, calling its valuation "cheap." Although Bankman-Fried said "there are no active M&A conversations with Robinhood," the company's stock price still soared as much as 22% on the report.
4. On the docket: Bank of Communications Co Ltd., Tsingtao Brewery Co Ltd., CarMax Inc., all reporting. Plus, look out for the the housing price index, expected to be released by the Federal Housing Finance Agency at 8:00 am ET.
5. Goldman Sachs recommends these outperforming stocks set to profit amid climbing interest rates and a strengthening dollar. The firm's chief US stock strategist said domestically focused companies have been major outperformers — and they are among his 37 best stock picks.
6. China is building a yuan currency reserve to compete with the dollar. The People's Bank of China announced it would team up with Indonesia, Malaysia, Hong Kong, and Chile to help prop up other economies facing volatility. Each will contribute about $2.2 billion worth of yuan.
7. Coinbase falls 11% after Goldman Sachs downgraded the crypto exchange to "sell." The bank set a $45 price target for Coinbase amid the ongoing decline in crypto prices, implying a potential drop of 23% from current levels.
8. A millennial who went from a "negative net worth" to saving over $200,000 in 2.5 years explained her strategy. In 2018, Chloé Daniels had roughly $68,000 in debt and minimal savings. Thanks to two important money management changes she made, now she has a six-figure net worth.
9. A growth investment chief who bets on disruption shared the companies he thinks are leading the shift. He also broke down his three-part investing strategy — and named the 10 stocks he expects to boom in the next two years.
10. Recessions aren't one size fits all. Amid growing talk of a downturn, here is an explainer on what a double-dip, or W-shaped, recession would mean. One cause of a double-dip is if governments raise interest rates as a reaction to an initial crisis.
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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.