10 things before the opening bell
Welcome back. A smattering of risks have put the global economy on its heels — and the world's two biggest economies are facing some of the most prominent headwinds.
Let's get into it.
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1. Slower growth in China can be felt all over the world. The globe's largest exporter of goods may miss its growth targets for 2022 — which would bring repercussions to economies everywhere.
"There's just enormous risk in China right now," top economist Stephen Roach told CNBC Friday. "China's facing formidable pressures, not just from rolling COVID lockdowns, but its steadfast insistence on deleveraging," he added, referring to the government's push to cut the debt burden.
Roach noted that after the 2008 crisis, China's 8% growth rate was able to soften the financial blow. Now, he warned, that cushion is gone.
Meanwhile, an engine of the US economy may also be at risk. That's according to legendary investor Jeremy Grantham, who issued a warning on another threat to US economic growth: the impact of rising mortgage rates on the housing market.
Pandemic stimulus sent mortgage rates plummeting and home prices soaring. Now, as rates rise — but supply continues to fail to meet demand — an affordability crisis is brewing that could pop the bubble.
"2000 showed you can just about skate through a stock market event," he told Bloomberg. "But Japan and 2008 showed you can't skate through a housing crisis."
In other news:
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2. US futures are down early Monday, as investors brace for faster rate hikes following Friday's strong jobs data. Plus, shares of Rivian slid premarket following a report that Ford is selling 8 million of its shares in the company. Here are the latest moves.
3. Earnings on deck: Alico Inc, Exelon Corp, and Maxim Power, all reporting.
4. The founder of a $140 million investment firm laid out which stocks to buy after inflation peaks in mid-2022. He also broke down why investors should focus on sectors that have priced in a recession, and on undervalued but quality firms. These are his 11 picks — and why he still thinks Netflix is an attractive bargain.
5. The world's largest oil exporter has cut prices for buyers in Asia and Europe. Saudi Aramco's move comes amid strict COVID-19 restrictions in China. In other oil news: Sanctions against Russia have knocked 1 million barrels of crude oil off its production each day. Three experts break down the implications of an EU oil ban for Moscow, and what could happen next.
6. US regulators are reportedly in China for talks about corporate audits as more than 100 companies face stock delisting. According to Reuters, a larger team of auditing regulators could go to Beijing later this year to settle a long-running accounting dispute. Here's what you want to know.
7. Bank of America said the S&P 500 could fall another 28% before the historic sell-off is over and markets bounce back. Stocks have more downside ahead as investors grapple with monetary policy tightening. Here's why BofA sees the bear market lasting potentially until October.
8. Meb Faber's momentum and income strategies have beaten the market for years. Now he's predicting US stocks to drop 50% — but he also shared what investors should do to stay safe amid the sell-off.
9. Wedbush's Dan Ives said it's time to buy the dip. Even as tech stocks have been crushed in 2022, Ives is still bullish as the sector begins its "bottoming process" following the Fed's double rate hike. See the six companies on his radar right now.
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10. The US added 428,000 jobs in April. The Friday jobs report beat out expectations, and showed job growth held strong last month as inflation stayed at a four-decade high and interest rates surged. Dig into the data here.
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Curated by Phil Rosen in New York. (Feedback or tips? Email prosen@insider.com or tweet @philrosenn.) Edited by Hallam Bullock (tweet @hallam_bullock) in London.
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