Top of the morning, readers. Today we’re breaking down Moscow’s looming default crisis, and how the US Treasury’s recent move complicates debt payments for the heavily sanctioned nation.
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1. Russia is on the very brink of default. This week, the US Treasury blocked JPMorgan from processing Russia’s attempt to make debt payments of more than $600 million, ramping up pressure on Moscow.
Russia is no longer allowed to make sovereign bond payments using American banks after the Treasury’s Monday policy change. A Russian debt default would likely be a major worry for the government, which could be locked out of capital markets for years.
Timothy Ash, an economist at BlueBay, told Insider he put the chances of a default at 80% following this latest move.
According to the country’s Finance Ministry, the Russian government has enough dollars to pay up, as it still has access to about half of its $640 billion of its currency reserves. But now Russia will likely struggle to find a bank to process payments, Ash explained, plus Western bondholders may be reluctant to receive money.
Meanwhile, on Wednesday, Russia said it had sent $650 million bond payment in rubles after the US Treasury blocked payment transfers in dollar. The day before, the country’s second-largest bank made bond payments in rubles instead of dollars or euros.
State-owned companies, too, are facing issues paying their bondholders. The clock is ticking on Moscow.
2. Global equities are falling this morning. The
is stepping up its hawkish anti-inflation rhetoric, while the West mulls more sanctions on Russia that could feed into further price rises. Take a look at what’s happening so far today.
3. Earnings on deck: Artemis Gold, Air China Limited, and BioNTech SE, all reporting.
4. These stocks are set up for long-term outperformance as the market comes off its worst quarter in two years, according to RBC. The firm’s analysts said this batch of companies should deliver double-digit returns over the next year, and warned investors not to get too defensive. See the list of 30 stocks here.
5. Twitter appointed Elon Musk to its board of directors, sending the stock higher. Musk also agreed to limit his stake to 14.9%. “Looking forward to working with Parag & Twitter board to make significant improvements to Twitter in coming months!”
6. Treasury Secretary Janet Yellen is giving a speech on cryptocurrency today. It will be her first official speech on digital assets, and follows the direction of President Biden’s executive order on crypto and the SEC Chair’s recent calls for regulation. Here’s what to know.
7. Jamie Dimon said the Fed will raise rates much more than markets currently expect, if there’s a strong recovery. In his annual shareholder letter, the JPMorgan CEO said the Fed should break its pattern of limiting hikes to 25 basis points, and be aggressive if necessary. Dimon noted that a stronger economy is more important than a stable market.
8. A former truck driver living paycheck-to-paycheck explained how he used real estate investing to achieve financial independence. “It isn’t a ‘get rich quick’ strategy,” Dion McNeeley told Insider. “It’s a ‘get wealth for sure.'”
9. Goldman Sachs named which stocks are expected to increase their net profit margins by up to 57% in the coming year. These picks are set to grow despite tightening financial conditions and a slowing economy, the bank said. Here’s Goldman’s 35 stock picks.
10. The highest-paying job varies across each state in the US. Doctors, such as family medicine practitioners, ranked highly across much of the country. See Insider’s breakdown of America’s top salaries per state here.
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Curated by Phil Rosen in New York. (Feedback or tips? Email [email protected] or tweet @philrosenn.)
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