Bernstein says these global stock picks will outperform — even as inflation fears grow

Bernstein has a raft of global stock picks to navigate higher-for-longer inflation.



Stay defensive with these global stocks amid market volatility, analysts say

HSBC, Credit Suisse and UBS name their top defensive stock picks.



Asia-Pacific markets gain after Wall Street recovery

SINGAPORE — Shares in Asia-Pacific rose on Friday after a comeback on Wall Street as investors continued to digest the Fed’s plans to fight inflation.

The Nikkei 225 gained 0.45% in early trade, while the Topix advanced 0.19%.

Australia’s S&P/ASX 200 rose 0.35%.

In South Korea, the Kospi climbed 0.38% and the Kosdaq added 0.70%.

Major stock indexes in the U.S. reversed losses to rise slightly at the close.

The Dow Jones Industrial Average gained 87.06 points, or 0.25%, to 34,583.57 after losing as much as 300 points earlier in the session. The S&P 500 was up 0.43% at 4,500.21, and the Nasdaq Composite inched up 0.06% to 13,897.30 following two straight days of losses.

Defensive stocks such as consumer staples and health care led the market comeback.

“The reaction to the Fed minutes early yesterday morning continued to dominate markets overnight,” Taylor Nugent, an economist at the National Australia Bank, wrote in a note.

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Wild inflation will hurt all financial assets, market researcher Jim Bianco warns

There may be no escape from the bond market turmoil — even for stock investors.

Market researcher Jim Bianco warns critical Federal Reserve policies to control wild inflation will inflict widespread losses on Wall Street.

“Eventually, this is going to come back and hurt all financial assets,” the Bianco Research president told CNBC “Fast Money” on Thursday.

Bianco turned bearish on stocks late last year, primarily due to inflation risks. He blames the Fed for waiting too long to end its pandemic easy money policies and lift interest rates.

“The call last year that inflation would be well-contained and transitory is arguably one of the worst forecasts in Federal Reserve history,” said Bianco. “They are now stuck with this ultra-aggressive policy because they didn’t start raising rates at a very leisurely pace a year ago.”

He worries about the big catch-up’s costs.

“They don’t intend on creating a hard landing. But what they do intend on doing is reining in prices,” Bianco said. “They want lower inflation, and they’re going to raise rates til they get lower inflation. How are they going to do that? They’re going to slow demand down.”

According to Bianco, the Fed’s only solution is to boot interest rates quickly and get wealthy people to stop spending. The bond market is already discounting the central bank’s likely bold moves.

“The bond market gets it. The carnage is epic,” he wrote in a recent Twitter thread. “This is not only the worst bond market in our career (total return) but might be the worst of our lifetime.”

Bianco, who sees a 75% chance of inflation within the next two years, expects a 50 basis point hike at its next policy meeting on May 3 through May 4.

“It will be 50 [basis points] all the way through until the Fed basically raises rates too much and breaks something. And, then they’ll be done. But, they’re not going to go back to 25,” he said. “If the stock market wants to go up, maybe they should be talking about 75 instead of 50.”

Bianco contends the Fed is aware the stakes are high.

“They don’t want to create the mistake in the other direction by being too timid right now. That’s out the window now,” Bianco said. “They don’t want to create a broken market. They don’t want to create a recession. But when you go down that path and you’re that adamant about trying to rein in inflation, it makes it very likely that you will create a mistake.”




Stock futures little changed following Thursday’s comeback as investors assess Fed plans

U.S. stock futures were little changed on Thursday night after the major averages staged a late-day comeback as investors appraised the likelihood of tighter monetary policy from the Federal Reserve to combat inflation.

Dow Jones Industrial Average futures rose 3 points, or 0.01%. S&P 500 and Nasdaq 100 futures climbed 0.02% and 0.05%, respectively.

The Dow Jones Industrial Average bounced back on Thursday after two straight days of losses. The Dow rose 87.06 points, or 0.25%, to 34,583.57 after dropping as much as 300 points earlier in the session. The S&P 500 gained 0.43% to 4,500.21, and the Nasdaq Composite ticked up 0.06% to 13,897.30.

The choppy session came amid continued uncertainty as investors weighed a more aggressive stance against inflation by the Federal Reserve. On Wednesday, the central bank disclosed its March meeting minutes, indicating that policymakers plan to reduce their bond holdings by a consensus amount of about $95 billion a month. The minutes also indicated potential interest rate hikes of 50 basis points in future meetings.

“We’re in a trading range market and it’s going to be this way for some time,” Stephanie Link, chief investment strategist and portfolio manager at Hightower, told CNBC’s “Closing Bell.” “And it’s really because we just have so many unknowns to deal with.”

On the economic front, the wholesale inventories report will be released on 10 a.m. on Friday.

Investors are also looking ahead to earnings season, which will kick off next week with reports from five big banks. JPMorgan will report before the bell on Wednesday. Citigroup, Goldman Sachs, Morgan Stanley and Wells Fargo will report before markets open on Thursday.



Senate passes ban on Russian oil and gas imports

Rail wagons for oil, fuel and liquefied gas cargo stand in sidings at Yanichkino railway station, close to the Gazprom Neft PJSC Moscow refinery in Moscow, Russia, on Monday, April 27, 2020.

Andrey Rudakov | Bloomberg | Getty Images

WASHINGTON — The Senate on Thursday passed a bill to ban imports of oil and gas from Russia, the latest measure in the U.S. governmentwide effort to economically isolate and penalize the Kremlin for its unprovoked invasion of Ukraine.

The legislation, passed in a 100-0 vote, prohibits the importation of oil, gas, coal and other energy products from Russia. It comes nearly a month after President Joe Biden signed an executive order that mandated essentially the same steps.

The Senate bill codifies Biden’s order into law, making it far more difficult for a future president to reverse it. The legislation passed after having been bogged down in the Senate for weeks.

The oil import ban passed immediately after the unanimous Senate approval of a bill to revoke Russia’s permanent normal trade relations with the United States, often referred to as “most favored nation” status. The legislation would also sever the normal trade relationship with Belarus, a key Russian ally.

“This package is about bringing every tool of economic pressure to bear on Vladimir Putin and his oligarch cronies,” said Sen. Ron Wyden, D-Ore., in a statement on the measures.

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“Putin’s Russia does not deserve to be a part of the economic order that has existed since the end of World War II,” he said.

Both the oil ban bill and the trade status legislation are expected to get votes in the House later in the day Thursday. They are expected to pass with overwhelming majorities.

This is breaking news. Please check back for updates.



UN votes to remove Russia from Human Rights Council

Russia’s UN Ambassador, Vassily Nebenzia, speaks at a meeting of the UN Security Council on threats to international peace and security, March 18, 2022, in New York.

Timothy A. Clary | AFP | Getty Images

WASHINGTON — The United Nations suspended Russia from its seat on the Human Rights Council on Thursday as the world calls out atrocities committed in Ukraine.

U.S. Ambassador to the United Nations Linda Thomas-Greenfield introduced the proposal earlier in the week following accusations that Russian troops tortured and killed Ukrainian civilians in Bucha, a suburb near Kyiv.

The bodies were discovered after Moscow withdrew its troops from Bucha. Ukrainian President Volodymyr Zelenskyy described the aftermath, which he saw firsthand on Monday, as a “genocide” and accused Russia of war crimes. The Kremlin has previously described its military actions in Ukraine as a “special operation” and has denied targeting civilians.

Thomas-Greenfield said Tuesday that Russia’s membership on the council hurts its credibility, “undermines the entire U.N. and it is just plain wrong.”

U.S. Ambassador to the U.N. Linda Thomas-Greenfield speaks during an emergency meeting of the United Nations Security Council after Russia’s invasion of Ukraine, in New York City, U.S., March 4, 2022.

Carlo Allegri | Reuters

The resolution to strip Russia of its seat on the Human Rights Council passed with 93 votes in favor, 24 against and 58 abstentions.

Belarus, China, Iran, Russia and Syria were among the U.N. members that voted against the resolution. India abstained from voting.

Members of the U.N. Human Rights Council, which are expected to uphold high human rights standards, are elected to serve for three years and are not eligible for immediate reelection after two consecutive terms.

Libya is the only country to be suspended from the 47-member Geneva-based council. The North African country was suspended in 2011 after a violent crackdown against protesters by forces loyal to then-leader Muammar Gaddafi.

Ahead of the vote, Ukrainian Ambassador Sergiy Kyslytsya galvanized members to take the “obvious and self-explanatory” move to suspend Russia from the Human Rights Council.

“Bucha and dozens of other Ukrainian cities and villages, where thousands of peaceful residents have been killed, tortured, raped, abducted and robbed by the Russian army, serve as an example of how dramatically far the Russian Federation has gone from its initial declarations in the Human Rights domain,” Kyslytsya said before the United Nations.

He urged countries to not be “indifferent bystanders,” adding that a no vote “means pulling a trigger” and siding with Russia.

On Tuesday, Zelenskyy called for a Nuremberg-style tribunal to investigate and prosecute Russian war crimes.

“The Russian military and those who gave them orders must be brought to justice immediately for war crimes in Ukraine,” he said in his nearly 20-minute speech before the United Nations Security Council.

Zelenskyy’s appearance before the international body followed Ukrainian claims that at least 300 civilians were tortured and killed in Bucha by Russian troops.

Over the weekend, the Russian invasion sparked renewed global outrage as horrific images emerged of bodies scattered across the streets, some with their hands tied and gunshot wounds to the back of the head.

On Tuesday, NATO Secretary-General Jens Stoltenberg said the alliance is working with the U.N.’s International Criminal Court to investigate Russian war crimes in Ukraine.

“Targeting and murdering civilians is a war crime. All the facts must be established and all those responsible for these atrocities must be brought to justice,” the alliance chief said Tuesay.

Stoltenberg, who briefed reporters from NATO’s headquarters ahead of a two-day foreign ministers’ meeting, said the alliance had reliable evidence of war crimes committed in Bucha, along with other cities in Ukraine.



Senate votes to strip Russia of ‘most favored nation’ trade status

Russian President Vladimir Putin chairs a meeting with members of the Security Council at the Novo-Ogaryovo state residence outside Moscow, Russia April 7, 2022.

Mikhail Klimentyev | Sputnik | Reuters

The Senate voted unanimously on Thursday to revoke Russia’s “most-favored-nation” trade status, an economic downgrade that opens the door to new damaging tariffs on Moscow over its invasion of Ukraine.

The chamber approved the measure in a 100-0 vote.

The bill, which now moves to the House, is a formal step to sever normal trade relations with Russia and allow import controls on key products like platinum, chemicals, iron and steel. The U.S. has already severed its normal trade relationship with Moscow in practice: the Biden administration moved to ban imports of oil, vodka, diamonds and seafood from Russia last month.

“Formally revoking normal trade relations with Russia is precisely the right thing for the Senate to do, because it will land another huge blow to Putin’s economy,” Senate Majority Leader Chuck Schumer, D-N.Y., said on the Senate floor Wednesday. “It’s a key part of any strategy for holding Putin accountable for his savage attacks on innocent civilians.”

Most favored nation status ensures that any member of the World Trade Organization receives equal trade treatment from other members and grants each designee immunity from a raft of steep import penalties.

The office of House Majority Leader Rep. Steny Hoyer, D-Md., said earlier Thursday that the chamber expects to take up the Senate’s legislation following its passage.

Should the House pass the Senate’s version of the legislation, it would travel to President Joe Biden’s desk for his signature into law.

“There are two categories you can be characterized under U.S. law: One gets lower tariffs, and one gets higher,” said Clete Willems, a partner at law firm Akin Gump and former U.S. attorney at the WTO.

“All other WTO members get this lower [tariff] rate — the average is about 2.8%,” he added. “And then for non-MFN, the average is around 20%. And so this legislation will change the tariff treatment of all of those products.”

As of 11 a.m. in Washington, Congress had also begun to vote on a separate bill to codify a promise Biden made last month to ban the import of Russian energy products into the United States.

Many nations, including the Group of Seven, have promised to work to end the West’s economic relations with Russia as the U.S. and its allies open investigations into what are likely to be deemed war crimes committed by Russian forces in Ukraine.

The Biden administration and its partners have worked to limit the Kremlin’s access to global financing organizations like the International Monetary Fund and the World Bank. The Treasury Department the Federal Reserve have also worked in tandem to block Russia’s access to currencies other than the ruble, as well as target individuals and families close to Russian President Vladimir Putin with penalties.

Treasury Secretary Janet Yellen says the combined penalties are designed to dent the ruble, ruin the Russian stock market and otherwise sap Moscow’s economy over time. Through the moves, the U.S. hopes to undermine Putin’s authority.

The bill the Senate passed Thursday morning should been considered “additive,” attorney Willems said, and damaging in the context of an international, coordinated effort.

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“It’s one among many moves that together start to have a real impact on the Russian economy,” he said. “The president will have the authority to raise tariffs and other select products. And the key imports we get from them beyond oil are platinum, chemicals, iron and steel, plywood, some kinds of engines and titanium.”

The U.S. has worked in concert with its allies to hamper the Russian economy.

European Union representatives on Thursday are set to approve an embargo on Russian coal. The timing of the phase-in period was still up for debate — especially between Poland and Germany — as of Thursday morning ET.

The EU is the most important Russian export market, as its members purchased about 40% of Moscow’s traded goods in 2019.

The latest economic sanctions come as Russia’s unprovoked war in Ukraine draws the globe’s outrage.

NATO foreign ministers and G-7 leaders on Thursday met with Ukraine’s Foreign Minister Dmytro Kuleba, who asked Western partners for “weapons, weapons, weapons.”

The U.S. House voted Wednesday evening in favor of legislation that accuses the Russian military, under Putin’s direction, of committing a litany of wrongdoings, including the intentional targeting of civilians and nonmilitary structures like schools and hospitals.



EU not expected to fully ban Russian coal imports until August, sources say

A front loader collects a shovel of coal from a pile at the Raspadsky open-pit coal mine, operated by Raspadskaya PJSC, in Mezhdurechensk, Russia, on Friday, Feb. 5, 2021.

Andrey Rudakov | Bloomberg | Getty Images

The European Union’s proposed ban on coal imports from Russia is not expected to take full effect until August — a month later than expected, two sources told CNBC Thursday.

Earlier this week, the European Commission, the executive arm of the EU, proposed the ban in the wake of mounting evidence of atrocities by Russian troops against Ukrainians in Bucha and other areas.

The original plan was to phase out coal imports within three months, an EU official, who did not want to be named due to the sensitivity of the talks, told CNBC. However, the same official added that this period had now been extended to four months — bringing the full implementation of the ban to August.

“There seems to have been an effective German lobby to extend the phase out period for existing coal contracts to four months,” a second EU official confirmed to CNBC Thursday.

Germany is one of the most skeptical nations when it comes to blocking energy supplies from Russia, but it’s not the only one. Austria and Hungary, for instance, are questioning it too.

These nations have the highest energy dependencies on Russia and argue that banning energy supplies from the country could have a bigger impact on their own economies than on Russia’s.

Germany, for instance, bought 21.5% of its coal from Russia in 2020. That number rose to 35.2% for oil imports and to 58.9% for natural gas, according to data from the European statistics office.

Approving energy sanctions has been a major challenge for the EU, given its high dependency on Russian supplies.

The region is heavily reliant on Russia’s oil and natural gas, although it is less dependent on coal imports — a key reason why this is the first energy sanction the European Commission has proposed.

Over 19% of the EU’s coal imports came from Russia in 2020, according to official European statistics. In contrast, 36.5% of its oil imports were from Russia, as were a whopping 41.1% of its gas imports.

However, momentum for a ban on Russian oil is building too.

Earlier this week, European Commission President Ursula von der Leyen said her team was working on oil sanctions.

“We are working on additional sanctions, including on oil imports, and we are reflecting on some of the ideas presented by the member states, such as taxes or specific payment channels such as an escrow account,” she said.

EU foreign affairs ministers will debate an oil ban on Monday next week, but they are unlikely to move ahead with such a measure for now as there needs to be consensus among all 27 member states to impose further sanctions.

Brent crude traded about 1.3% higher Thursday at $102.44 a barrel. Prices have been on the rise since Russia’s unprovoked invasion of Ukraine on Feb. 24.



UK targets more nuclear, wind power — and fossil fuels — in bid for energy security

Alongside a ramp up in nuclear power, the British Energy Security Strategy envisages up to 50 GW of offshore wind and 10 GW of hydrogen – half of which would be so-called green hydrogen – by 2030.

Christopher Furlong | Getty Images News | Getty Images

The U.K. government has revealed details of its long awaited, “bold” energy security strategy, but critics have derided its inclusion of fossil fuels and what they view as a lack of ambition.

In a release Wednesday, the government heralded a “major acceleration of homegrown power in Britain’s plan for greater energy independence.”

The plans — known as the British Energy Security Strategy — mean that more “cleaner” and “affordable” energy will be produced in Great Britain, the government said, as the country seeks to “boost long-term energy independence, security and prosperity.”

The government is now targeting as much as 24 gigawatts of nuclear power by 2050, which it said would represent around a quarter of the country’s projected electricity demand. The strategy could see as many as eight reactors developed.

Alongside nuclear, the plans include up to 50 GW of offshore wind and 10 GW of “low carbon” hydrogen capacity, at least half of which would be so-called green hydrogen, by 2030. The government also said solar capacity could be set to increase fivefold by 2035, up from 14 GW today.

When it comes to onshore wind — a divisive subject for Prime Minister Boris Johnson’s Conservative Party — the government said it would consult on “developing partnerships with a limited number of supportive communities who wish to host new onshore wind infrastructure in return for guaranteed lower energy bills.”

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However, in a move that sparked outrage among environmental campaigners, the government also said its strategy would be “supporting the production of domestic oil and gas in the nearer term,” with a licensing round for new oil and gas projects in the North Sea slated for launch this fall. The government claimed its strategy could result in 95% of Great Britain’s electricity being “low carbon” by 2030.

“The simple truth is that the more cheap, clean power we generate within our borders, the less exposed we will be to eye watering fossil fuel prices set by global markets we can’t control,” Kwasi Kwarteng, the country’s business and energy secretary, said.

“Scaling up cheap renewables and new nuclear, while maximising North Sea production, is the best and only way to ensure our energy independence over the coming years.”

The strategy’s publication comes at a time when Russia’s invasion of Ukraine has heightened concerns about energy security. Russia is a major supplier of oil and gas, and its actions in Ukraine have caused a number of economies to try and find ways to reduce their reliance on it.

In response to the invasion, the U.K. has said it will “phase out imports of Russian oil” — which meets 8% of its total oil demand — by the end of this year. Russian natural gas, the government says, made up “less than 4%” of its supply, adding that ministers were “exploring options to reduce this further.”

Fool’s gold?

While Business Secretary Kwarteng was bullish about the strategy and its prospects, the plan drew ire from some quarters.  

“This fails as a strategy, as it does not do the most obvious things that would reduce energy demand and protect households from price hikes,” Danny Gross, an energy campaigner at Friends of the Earth, said.

“Delving deeper into the UK’s treasure trove of renewables is the surest path to meeting our energy needs — not the fool’s gold of fossil fuels.”

While the acceleration in offshore wind developments was “welcome,” Gross said ministers had to “go further and make the most of the UK’s massive onshore wind resources.”

Meanwhile, Lisa Fischer, programme lead at climate change think tank E3G, argued that the future of the North Sea lay in renewables rather than oil and gas.

“A push for offshore wind is welcome, but embracing oil and gas at the same time will act as a drag on the UK’s leap towards an affordable and clean energy future,” she said.

‘Moral and economic madness’

The British Energy Security Strategy is being published in the same week that the Intergovernmental Panel on Climate Change released its latest report.

“Limiting global warming will require major transitions in the energy sector,” the IPCC said in a news release. “This will involve a substantial reduction in fossil fuel use, widespread electrification, improved energy efficiency, and use of alternative fuels (such as hydrogen).”

Commenting on the report, U.N. Secretary General Antonio Guterres pulled no punches. “Climate activists are sometimes depicted as dangerous radicals,” he said. “But the truly dangerous radicals are the countries that are increasing the production of fossil fuels.”

In March, the International Energy Agency reported that 2021 saw energy-related carbon dioxide emissions rise to their highest level in history. The IEA found energy-related global CO2 emissions increased by 6% in 2021 to reach a record high of 36.3 billion metric tons.

The same month also saw Guterres warn that the planet had emerged from last year’s COP26 summit in Glasgow with “a certain naive optimism” and was “sleepwalking to climate catastrophe.”