The euro sank below parity for the second time this year on Monday. Here's what's moving currency markets.
Howdy Opening Bell crew. Phil Rosen here, reporting from Wall Street. Yesterday, for the second time this year, I watched the euro slip below the dollar.
As compelled as I was to immediately book a flight to the continent, instead I decided to bring you all the details of what's happening with the world's two biggest currencies.
And, as we've covered here before, the move can be traced back to Russia.
Let's get started.
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1. When Russia's Gazprom unexpectedly announced the Nord Stream 1 pipeline will close for a three-day maintenance shutdown, confidence in Europe's economy stumbled.
The euro moved below the dollar on a 0.7% drop to hit $0.9968 on Monday — and continued falling Tuesday — reflecting the worsening energy crisis, heightened stakes, and steeper odds for a downturn, Insider's Carla Mozeé writes.
I caught up with Michael Reinking, NYSE's senior market strategist, who said industrial companies are beginning to reduce production, and firms are paring back their hedging on natural gas futures as prices skyrocket while demand dwindles.
"Essentially, industrial players are saying if [natural gas] prices don't improve then they'll start shutting down factories," he said.
But, to Reinking, parity with the greenback is not the full story.
Other currencies, including China's yuan and Japan's yen, also fell, pointing more broadly to markets reacting to a hawkish Federal Reserve.
"The US is the best house on a bad block right now," he explained to me, suggesting that investors are flocking to the safe haven dollar as speculation mounts ahead of Friday's Fed gathering in Jackson Hole, Wyoming.
Since June, a narrative has gained steam for a potential Fed pivot, but Reinking expects Chair Powell to cool those expectations by reiterating an aggressive stance — ultimately pushing the dollar even higher.
JPMorgan analysts, too, say that 75 basis points is on tap next month, though it should be the last big move by the central bank for the year.
"There's two opposing forces moving in the same direction," Reinking said. "The European energy crisis and the US getting more hawkish in their policy tone."
What's your outlook for the euro through the end of this year? Email me at prosen@insider.com or tweet @philrosenn.
In other news:
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3. On the docket: Macy's Inc, Nordstrom Inc., and more, all reporting. Plus, look out for the number of new home sales, due to be released by the US Census Bureau later this morning.
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5. Meet Jake Freeman, the USC student who cashed out a $110 million profit on Bed Bath & Beyond. The 20-year-old math and economics major has published complex academic papers and has shown prodigious intellect from an early age. Here's his story — including how he made his first $500 investment at age 13.
6. American oil is heading overseas at a record pace. Crude exports to South Korea, China, and India have soared as buyers scoop up more than 20 million barrels of US supplies this month. It comes as the US's strategic oil reserves fell to their lowest level in 37 years last week, following the releases ordered by President Joe Biden.
7. Wells Fargo warned investors it's time to get cautious. It may be high time to get out of equity positions despite the recent rally, CIO Darrell Cronk told Bloomberg. "This very much looks like a bear market rally," he said. "You've got to play defense."
8. This 24-year-old financial planner suggested having multiple streams of income but cautioned that filing taxes can present a big headache for young workers. He shared the two ways to deal with complex paperwork for side hustles — and the best option for someone looking to upgrade to a "mid hustle."
9. These are the most undervalued real estate stocks in the market right now. Some have discounts to fair value of up to 64%, according to investment research giant Morningstar. Here's its list of 10 companies.
10. AMC Entertainment cratered 40% the day of the company's issuance of 'APE' preferred stock. The new issuance could one day be converted into common shares and lead to more dilution. Dig into the meme stock's implosion here.
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Curated by Phil Rosen in New York. (Feedback or tips? Email prosen@insider.com or tweet @philrosenn).
Edited by Max Adams (@maxradams) in New York and Hallam Bullock (@hallam_bullock) in London.