Stansberry Research

Monday Morning Market Headlines

C. Scott GarlissStansberry NewsWire

Five Stories Moving the Market:

China reopens borders in final farewell to zero-COVID – Reuters. After three years, mainland China opened sea and land crossings with Hong Kong and ended a requirement for incoming travelers to quarantine, dismantling a final pillar of a zero-COVID policy that had shielded China's 1.4 billion people from the virus but also cut them off from the rest of the world.

ECB’s Lane says price pressures won’t vanish if energy costs ease – Bloomberg. European Central Bank Chief Economist Philip Lane said price pressures in the euro area will remain elevated for the next several years, even if surging energy costs are starting to ease.

Wall Street sets a low bar for earnings season – WSJ. Analysts expect companies in the S&P 500 to report their first year-over-year decline in quarterly earnings since the height of the Covid-19 pandemic in 2020.

U.S. Department of Energy rejects initial bids to resupply oil stockpile – Reuters. The U.S. Department of Energy has rejected the first batch of bids from oil companies to resupply a small amount of oil to the nation’s emergency crude oil stockpile in February, according to a DOE spokesperson.

House Republicans turn focus to spending, China after dramatic speaker vote – WSJ. The House will dive into its first week of substantive work with bills to cut Internal Revenue Service funding and investigate economic competition from China, after a leadership election that underscored Republican divides and the fragile position of Speaker Kevin McCarthy (R-CA).

Market Headlines:

Global Macro:

The European Central Bank's key interest rates should soon hit their peak amid efforts to bring down inflation, unless new external shocks emerge, ECB Governing Council member Mario Centeno said on Friday - Reuters.

Taiwanese lawmakers have passed new rules that let local chip firms turn 25% of their annual research and development expenses into tax credits, part of efforts to keep cutting-edge semiconductor technologies at home and maintain the island’s technology leadership - Bloomberg.

Britain’s wind farms contributed a record 26.8% of the country’s electricity in 2022 although gas-fired power plants remained the biggest source of power, National Grid data showed on Friday - Reuters.

Russian President Vladimir Putin’s plans to squeeze Europe by weaponizing energy look to be fizzling at least for now as mild weather, a wider array of suppliers, and efforts to reduce demand are helping, with gas reserves still nearly full and prices tumbling to pre-war levels – Bloomberg.

Japanese Prime Minister Fumio Kishida said on Sunday his government and the central bank must discuss their relationship in guiding economic policy after he names a new Bank of Japan (BOJ) governor in April - Reuters.

Federal Reserve Governor Lisa Cook noted recent signs that inflation has cooled but said it has to fall much more to reach acceptable levels - WSJ.

The U.S. labor market is losing momentum as hiring and wage growth cooled in December, showing the effects of slower economic growth and the Federal Reserve’s interest-rate increases - WSJ.

Hedge funds are growing ever more bearish on the dollar, underscoring speculation that the Federal Reserve may slow the pace of its interest-rate hikes - Bloomberg.

U.S. Treasurys are off to a solid start in 2023, providing a glimmer of hope to investors recovering from a historically terrible year for bonds - WSJ.

Investors are bracing for a miserable stretch of earnings reports that will likely extend the dominance of value shares as Corporate America grapples with high inflation and rising borrowing costs, the latest MLIV Pulse survey shows - Bloomberg.

A new wave of tech layoffs signals how executives in the industry are pivoting from a growth-above-all mindset to protecting their bottom line - WSJ.

Company Specific:

Hundreds of Tesla owners gathered at the automaker's showrooms and distribution centers in China over the weekend, demanding rebates and credit after sudden price cuts they said meant they had overpaid for electric cars they bought earlier - Reuters.

Goldman Sachs is embarking on one of its biggest rounds of job cuts ever as it locks in on a plan to eliminate about 3,200 positions this week, with the bank’s leadership going deeper than rivals to shed jobs - Bloomberg.

China is in talks with Pfizer to secure a license that will allow domestic drugmakers to manufacture and distribute a generic version of the U.S. firm's COVID-19 antiviral drug Paxlovid in China – Reuters.

Eisai and its partner Biogen gained initial U.S. regulatory clearance for lecanemab, the first treatment clearly shown to slow the advance of brain-wasting Alzheimer’s disease - Bloomberg.