Stansberry Research

Tuesday Morning Market Headlines

C. Scott GarlissStansberry NewsWire

Five Stories Moving the Market:

Lagarde says ECB rates have to rise significantly – Reuters. The European Central Bank will keep raising interest rates quickly to slow inflation which remains far too high, ECB President Christine Lagarde said on Monday, largely repeating the bank's most recent policy guidance.

U.S. to increase pressure on China to stop importing Iranian oil – Bloomberg. The Biden administration’s top Iran envoy said it will increase pressure on China to cease imports of Iranian oil as the US tries to enforce nuclear sanctions.

Tech’s ferocious rally raises the bar for earnings – Bloomberg. U.S. tech shares are trouncing a broad market rally to start the year, a source of concern for some traders bracing for the sector’s worst earnings slump since 2016.

EU's planned reforms aim to better protect power bills from market swings – Reuters. The European Commission said the European Union's proposals to overhaul its electricity market will attempt to better protect consumer energy bills from short-term swings in fossil fuel prices.

DOJ poised to sue Google over digital ad market dominance – Bloomberg. The U.S. Justice Department is poised to sue Alphabet’s Google as soon as today regarding the search giant’s dominance over the digital advertising market, according to people familiar with the matter.

Market Headlines:

Global Macro:

China is quickly becoming the dominant force in liquefied natural gas, with Chinese buyers accounting for 40% of recent long-term LNG contracts among global players – Nikkei Asia.

There’s been a rash of recent wind turbine malfunctions across the U.S. and Europe, ranging from failures of key components to full collapses; adding hundreds of millions of dollars in costs for the three largest Western turbine makers, GE, Vestas Wind Systems, and Siemens Energy’s Siemens Gamesa unit - Bloomberg.

Chinese buyers are thought to have booked at least several large vessels of French barley this month, swelling a French export program as merchants ship out a previous round of sales from late last year - Reuters.

European Central Bank Governing Council member Peter Kazimir joined a chorus of fellow hawks in rejecting suggestions that moderating inflation will soon warrant smaller interest-rate increases - Bloomberg.

Australian businesses conditions moderated for a third straight month in December, while price pressures began to ease, pointing to a likely peak in inflation, according to a business survey issued on Tuesday - Reuters.

Behind this year’s improved start for markets lies a broad wager that inflation will soon post a once-in-a-generation decline - WSJ.

U.S. Treasury Secretary Janet Yellen said she’s encouraged by progress on inflation, with energy prices and supply-chain issues easing across the globe even as the U.S. labor market remains strong - Bloomberg.

Small banks have been doubly hit by customers pulling cash from bank deposits and investing in now-more-attractive U.S. Treasurys and money-market accounts, as well as plunging securities portfolio values, putting them at risk of being unable to access low-cost funding from Federal Home Loan Banks, a critical source of liquidity - WSJ.

Wells Fargo, Bank of America, JPMorgan Chase, and four other banks are working on a new product that will allow shoppers to pay at merchants’ online checkout with a wallet that will be linked to their debit and credit cards - WSJ.

Company Specific:

Google’s Chief Executive Officer Sundar Pichai told employees that job cuts were made in a bid to act decisively as the company’s growth slowed - Bloomberg.

Spotify Technology is laying off roughly 6% of its workforce as part of broader cost-cutting measures after the streaming company went on a spending spree during the pandemic - WSJ.

Microsoft is investing $10 billion in OpenAI, whose artificial intelligence tool ChatGPT has lit up the internet since its introduction in November, amassing more than a million users within days and touching off a fresh debate over the role of AI in the workplace - Bloomberg.

A new generation of chips using Arm technology is heaping pressure on Intel as the British chip-design specialist prepares for what could be one of the year’s highest-profile public listings - WSJ.

Activist investor Elliott Management Corp has made a multi-billion dollar investment in cloud-based software firm Salesforce, according to people familiar with the matter - Reuters.