10 things before the opening bell

Good morning. A sea of red has throttled the stock market in recent months, and Wall Street seems to think that things will only improve if the Fed pumps the brakes on tightening. 

But a few things have to happen for Mr. Powell to make that call. 

Coffee at the ready…

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Federal Reserve Board Chairman Jerome Powell

1. Wall Street needs “Fed pause” to save the market. But it isn’t so straightforward. Stocks won’t hit the bottom until the central bank halts its tightening cycle, the consensus among experts seems to be. 

Fed tightening is the market’s biggest headwind, DataTrek Research analysts said. The Nasdaq and S&P 500 are down roughly 30% and 20% year-to-date, respectively. 

But for the Fed to ease up, Stifel said the central bank must observe three things: 

1. Lower gas prices
2. Lower inflation
3. Lower GDP growth

In other words: Bad news may be good news for investors, and the Fed likely welcomes the current downturn as an inflation-busting tool, DataTrek said. 

“Lower stock prices tell companies to stop hiring so aggressively and feeding wage inflation,” DataTrek wrote. “They also create a reverse wealth effect, which should curtail consumer spending.”

But as long as the Fed remains hawkish — and Wednesday’s minutes said summer could see two half-point hikes — Stifel said investors should own more value stocks relative to growth. 

“Until the Fed is less hawkish and oil breaks down, we’ll stay with our 10:3 ratio of defensive value and selected growth,” Stifel analysts wrote.

In other news:

People commute in the central business district in Beijing, China.

2. US stock futures seesawed early Thursday, after minutes from the Federal Reserve’s meeting confirmed big rate hikes are coming. Here are the latest market moves.

3. Coming up today: Ulta Beauty, Costco Wholesale Corp, and Dollar Tree, all reporting. Plus, look out for the Bureau of Economic Analysis’ revised GDP data for the first quarter of 2022, publishing at 7:30 am ET.  

4. A stock-picking expert shared a batch of fallen-star names expected to surge by up to 135% when bullishness returns to Wall Street. Smart investors hunt for bargains when the dust settles after the markets fall. Maxim Manturov laid out his seven top companies he’s eyeing for big returns. 

5. Elon Musk is funding his $44 billion Twitter takeover with more of his own wealth. As per The Wall Street Journal, Musk plans to fund the buyout with $33.5 billion in equity, up from the initial $27.25 billion. He is also looking at additional backers, such as former Twitter CEO Jack Dorsey. The news caused Twitter’s stock price to jump as much as 5.5% in premarket trading. 

6. JPMorgan made a bullish call on bitcoin. The bank projected that the world’s largest crypto by market cap will rise 28% — and said cryptocurrencies are now its preferred alternative asset. 

7. Russia’s central bank slashes interest rates to 11%, from 14%. It is the bank’s third rate cut in just over a month, and is part of an effort to limit a rally in the ruble. 

8. Sir John Templeton’s growth fund averages 15% annual returns over a 38-year period. He is widely regarded as one of the greatest investors of all time. His great-niece broke down the four principles that guided his career success. 

9. Rich Rosenblum oversees a crypto market maker that moves billions each day. He shared a token that isn’t “very sexy” but is fighting the bearish tide — and also shed light on a little-known chain to watch ahead of a potential surge in demand for new networks. 

10. A lot of people are saying we’re in a recession right now. Even though economic data shows we’re not quite in a slump just yet, the general consensus seems to think otherwise. Google searches for “recession” in the US are climbing.  

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Curated by Phil Rosen in New York. (Feedback or tips? Email [email protected] or tweet @philrosenn.) Edited by Hallam Bullock (tweet @hallam_bullock) in London. 

Read the original article on Business Insider