Good morning. An inverted yield curve has spooked some — not all — of Wall Street's big name commentators. Plus, today we're explaining why Visa is turning its attention to the booming NFT space.
Here we go.
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1. Experts are divided over the yield curve. This week, the 2-year and 10-year Treasury yields briefly inverted for the first time since 2019. Historically, inversions in the short- and long-term yields have been predictors of sharp economic slowdowns in the US — but there isn't a consensus on Wall Street.
A Pimco fund manager told Bloomberg that the signal isn't a reliable indicator this time around, thanks to the "enormous amount of quantitative easing" from central banks. Market bull Tony Dwyer seems to agree — he told CNBC that the fears driven by bond yields are overdone.
Fundstrat's head of research and stock market bull, Tom Lee, gave three reasons why stocks are actually poised for more upside despite the inversion. To make his case, highlighted the difference between nominal interest rates and real interest rates. The latter, which take into account the rate of inflation, are still in negative territory.
But "Bond King" Jeff Gundlach is certain that the inversion does, in fact, matter.
"Right on cue, the 'It Doesn't Matter This Time' white papers are coming out," the DoubleLine Capital CEO tweeted Wednesday. "Don't believe them."
The 2-year yield is currently at 2.318%, and the 10-year yield is currently at 2.354%.
In other news:
2. US stocks head for a strong close to the month. But Ukraine, inflation and a hawkish Fed mean the S&P 500 is in the red in Q1. Oil has slumped after reports the US may release a huge amount of crude from its reserves. See what's happening across the markets.
3. Earnings on deck: Aehr Test Systems, Acorn Energy, and Reed's Inc., all reporting.
4. Morgan Stanley said the S&P 500 still has 14% downside amid mounting recession fears. The firm's chief investment officer Mike Wilson shared his tips for investors looking to bolster their portfolios in the current landscape. Here's where he recommends to reduce exposure, and what opportunities are left to scoop up.
5. US regulators are taking aim at SPACs. The SEC is lining up rules to make disclosures far more like those used in IPOs. Take a look at the details here.
6. Axie Infinity's owner vows to reimburse victims of the $600 million theft after a hacker pulled off one of the largest crypto heists in history. Users who lost tokens during the massive Ronin Network hack will be reimbursed, said Sky Mavis' COO. Here's the latest update on the token swindle.
7. Tesla's stock split shows that the EV maker is in a massive position of strength, according to Wedbush. Investors will look to this move as a catalyst to buy, top analyst Dan Ives said. "A company that's going to do their second split in two years is not doing it because they're in a position of weakness."
8. The most value in an NFT is made by getting in early and picking a project that has high liquidity, according to this crypto investor. While he thinks generative art is played out, he gave his six tips for finding and investing in the next NFT craze.
9. Bank of America shared which three sectors in healthcare are best positioned for upside during a recession. Physician groups, post-acute care, and hospitals are most resilient to economic pressures, its analysts said. See the 10 healthcare stocks that they have in their sights.
10. Over four million Americans have quit their jobs for nine months straight. Through much of the pandemic, workers have heard they can leave their current position to go make money somewhere else — and they're doing exactly that.
Keep up with the latest
Curated by Phil Rosen in New York. (Feedback or tips? Email prosen@insider.com or tweet @philrosenn.)