Crude could be in for a momentous Wednesday. Phil Rosen here with you on hump day, eagerly awaiting updates from President Joe Biden’s arrival in the Middle East.
Today, the Commander in Chief will try to shake things up in oil markets as he travels to Saudi Arabia to mull the global energy crunch. Below, I break down what you want to know ahead of any wheelin’ and dealin’ that might take place.
Plus, Twitter has followed through with its promise to sue Elon Musk, and the lawsuit is full of fiery accusations.
And by the way, Insider is seeking nominations for its new series, 100 People Transforming Business. Get the deets here.
Alright, nobody blink — we’ve got a lot of ground to cover.
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President Joe Biden.
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1. Even if talks go well this week, OPEC will be hard pressed to resolve the tight market. As part of its year-ahead outlook, the oil cartel said Tuesday that global demand will continue to outpace supply as member countries struggle to increase flows.
In the group’s first outlook for 2023, OPEC said demand will balloon by 2.7 million barrels per day. To fill that gap, OPEC would need to increase its output well above the mark it hit in June, even though member nations have already fallen short of quotas in recent months.
All this doesn’t bode well for Biden’s arrival in Saudi Arabia, as he’s expected to push OPEC’s de facto leader to increase output to alleviate price pressures in the US.
But, like other top producers in the UAE, the Saudis have little spare production capacity.
Meanwhile, the IEA provided little consolation ahead of Biden’s travels. “The world has never witnessed such a major energy crisis in terms of its depth and its complexity,” IEA head Fatih Birol said Tuesday.
With winter in Europe not far off, the energy chief warned the region will face great challenges as Russia threatens to cut off fuel, a move that would have dire repercussions for the global economy.
As Birol put it: “We might not have seen the worst of it yet — this is affecting the entire world.”
In other news:
Friday’s inflation print shocked investors.
Xinhua News Agency/Getty Images
2. US stock futures traded cautiously Wednesday, as investors brace for key US inflation data. Meanwhile, Twitter’s share price is up in pre-market trading, after the social media company sued Elon Musk, saying the billionaire is obligated to complete the $44 billion deal. Here are the latest market moves.
3. On the docket: Fastenal Co., Delta Air Lines Inc., and more, all reporting. Plus, look out for June’s Consumer Price Index data, expected from the US Bureau of Labor Statistics at 7:30 am ET.
4. Experts on Wall Street are warning that the stock market sell-off likely isn’t over. The S&P 500 has fallen as much as 23% this year, but some of the pros forecast further downside. These 10 charts paint a picture of what’s to come.
5. Investors should expect a tough earnings season, according to Bank of America. Corporate sentiment sits at its lowest level since the start of the pandemic, and macro headwinds to earnings growth are steadily building. Here’s what you want to know.
6. Oil prices could jump to $140 a barrel if Russian crude doesn’t get a price cap. That’s what a US Treasury official told Reuters on Tuesday. G7 leaders proposed the crude price ceiling at a June summit — which could limit Russian crude from selling over $60.
7. Investing legend Charlie Munger compared buying crypto to investing in nothing. Warren Buffett’s longtime business partner slammed digital asset sellers as “delusional or evil.” Plus, he issued a warning against buying or trading cryptocurrencies and explained why he avoids it like a “dirty sewer”.
8. BlackRock said investors should be prepared for a long stretch of market volatility. And the turbulence will last for years, according to the world’s biggest asset manager. The firm’s analysts broke down its strategy to help investors roll with the punches — including these four portfolio changes to make during the uncertainty.
9. A portfolio manager beating 99% of his peers this year explained his process for picking winners amid a market downturn. James Abate broke down his strategy for investing in the current landscape, and shared seven recession-proof stocks he loves right now.
10. Shares of Canoo surged as much as 107% yesterday after the EV maker inked a deal with Walmart. The agreement will see the retail giant purchase 4,500 delivery vehicles with the option to buy up to 10,000. It is a potential course correction for Canoo, which reported a steep loss last year.
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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.