Good morning.
Markets are under intense pressure as the situation in Ukraine intensifies. We’ve also got a look at diverging inflation expectations among consumers and corporations for the months ahead.
Let’s take a look at the latest developments.
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1. JPMorgan strategists give their outlook against the backdrop of war in Europe. Early on Thursday, Russian president Vladimir Putin announced a military assault on Ukraine. Global equities have tanked and oil has shot above $100 a barrel in the immediate wake of the full-scale invasion.
Rising geopolitical tensions between the two countries, in addition to the Federal Reserve’s impending interest rate hikes, has led to a risk-off start to 2022.
But this stock market weakness doesn’t validate “end-of-cycle worries,” said JPMorgan’s Marko Kolanovic. He advised investors to hedge their bets with energy and materials stocks and said he thinks risk assets will rally if things de-escalate in Ukraine.
“We remain overweight equities and underweight bonds as we don’t see the current geopolitical risk as threatening the 2022 growth outlook,” Kolanovic said.
JPMorgan’s chief US equity strategist agrees with his colleague’s picks, naming energy as the bank’s “highest conviction” sector of 2022. In an interview with CNBC, he laid out five reasons why it makes for a good hedge against both historic inflation and geopolitical crises.
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In other news:
2. US stock futures are down sharply after Russia’s attack on Ukraine. Dow futures lost more than 800 points in very early European trading, while gold and other safe-havens are rallying. Take a look at the latest.
3. On deck today: Beyond Meat, Goldman Sachs BDC, and Block Inc, all reporting.
4. Hedge funds piled into these 14 energy stocks in the fourth quarter, which have been outperforming as energy prices soar amid Russia-Ukraine tensions. Most of these stocks have gained double-digits this year amid high inflation, geopolitical conflicts, and an imbalance between supply and demand. See the list here.
5. FTX hired a new beauty entrepreneur as it vyes for entry into the $300 billion luxury goods market. After expanding into sports during 2021, the crypto exchange hired Lauren Remington Platt as its new Head of Global Luxury Partnerships.
6. The EU wants its new financial crime watchdog to start supervising crypto as it fights money laundering, per a new report. “It is key that the scope of the new EU authority explicitly includes crypto assets,” said an EU lawmaker. Here’s what to keep an eye on.
7. The most popular hedge fund stocks have suffered their worst-ever performance relative to the S&P 500, said Goldman Sachs. After a series of earnings shocks, high-flying growth stocks like Meta and Netflix saw deep underperformance and now, big firms are rotating away from growth and into value.
8. A 31-year-old making $34,000 a month explained how to scale earnings for online side hustles. Sharon Tseung traveled the world for two years as she worked remotely from her laptop. From selling digital products to blogging, filming YouTube videos, and creating online courses, she broke down how she makes it work.
9. Wall Street’s most veteran tech analyst expects a market recovery in late 2022 after a massive sell-off that could continue for months. Longtime analyst Mark Mahaney said tech stocks could fall further, but he shared his best bets for when the sector stabilizes. Here are his three top stocks in the space.
Madison Hoff/Insider
10. Inflation expectations between companies and consumers are diverging. Recent survey results revealed a fundamental disconnect. Shoppers are growing confident that inflation will fall back to earth, while businesses expect the opposite. See the full report.
Curated by Phil Rosen in New York. (Feedback or tips? Email prosen@insider.com or tweet @philrosenn.)
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