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Stock futures and crypto sputter ahead of ‘Fed Day’

December 15, 2021, 10:39 AM UTC

Good morning, Bull Sheeters. (There’s only a few more times I can say that… so, up or down, red or green, you’ll get hit with that greeting every day this week when you open up this email.)

Once again, U.S. futures are under pressure as investors await the big 2 p.m. E.T. FOMC press conference. It’s a mixed picture overseas, as I type. Asian equities faltered, while Europe was mostly higher. But volumes are muted ahead of Fed Day.

If you were looking for action this morning, you’re not going to get it in the commodities or crypto markets, either. Bitcoin is flat, but it’s a touch nearer to its 200-day moving average. Dogecoin, by the way, is falling back to Earth, following yesterday’s 🚀ride.

In today’s essay, I pull out some goodies from a trio of recent investor notes that could help you think through your portfolio in the year ahead.

But first, let’s see what’s moving the markets this morning.

Markets update


  • Stocks didn’t fare well in Asia. For the second straight day, the Hang Seng was the biggest loser in the region, falling by 0.9%.
  • The Chinese economic outlook is dragging down stocks. The world’s second biggest economy slowed yet again last month, with the sagging property market and weaker retail sales the big culprits.
  • Omicron is also sending trembles through the market. Sinovac’s COVID-19 vaccine, one of the most distributed in the world, provides insufficient antibodies to fight off the mutant variant, a new Hong Kong study shows.


  • The European bourses were mixed at the open, but then turned higher. The Stoxx Europe 600 was up 0.4% two hours into the trading session. Tech and basic resources led the way higher.
  • Shares in Inditex fell 2% out of the gates even after the world’s biggest fashion retailer reported a record profits-beat, with the e-commerce business leading the way.


  • U.S. futures have been up and down all morning. That’s after all three major averages sunk for a second straight day Tuesday. The one S&P 500 sector in the green yesterday? Financials.
  • Shares in Pfizer are up 1.2% in pre-market after the drugmaker announced its antiviral pill Paxlovid is effective in reducing serious illness in COVID patients, and also works well agains Omicron.
  • Ahead of today’s big Fed press conference, we got another batch of eye-watering inflation data yesterday. The producer price index surged to 9.6% last month, reinforcing bets that Jerome Powell & co. will take a more hawkish stance on tapering and, further down the line, interest rates.


  • Gold continues to flatline. It trades below $1,770/ounce.
  • The dollar is a touch lower.
  • Crude is down again on Tuesday with Brent trading around $72/barrel.
  • After a volatile Tuesday in crypto land, Bitcoin is flat, trading around $48,000.


On inflation, wages, and hot stock tips

I’ve been going through my inbox to fish out analysis and data points that could help you make some investment decisions. Here are a few reports that caught my eye:

Goldman’s Top 20

Following on yesterday’s essay, here is Goldman Sachs’ top-20 list of stocks to watch (or invest in) as we head into an environment of tighter monetary policy. Mastercard and MP Materials top the list.

Goldman Sachs

Why does Goldman like these stocks? Because they land squarely in the “quality growth” basket—i.e., stocks that are showing high growth and pack in high margins.

Not sweating inflation

Yeah, yesterday’s PPI numbers were dismal. As was last week’s CPI reading. But investors seem to be betting inflation is peaking. That’s the take from BofA Securities’ latest Fund Manager Survey.

The chart above shows inflation expectations are at a multi-year low.

Don’t count out stocks—and, in particular, tech stocks

Okay, fund managers (among others) are really down on bonds. No surprise there. What you might find more surprising is how bullish they are on stocks and cash.

Labor Pains

Gotta admit: These charts here from Morgan Stanley’s wealth management team about the U.S. labor market really surprised me.

So, wage growth is at a 40-year high (after decades of dismal penny-pinching by employers).

And yet, there are still roughly 20 million working-age adults who plan to sit on the sidelines.

How does that potentially impact your stock portfolio? For starters, analysts advise, look hard at company’s labor costs. If they were uncompetitive before the pandemic, they’re probably about to get worse in a tighter jobs market.



When I moved to Rome, back, yeesh, 17 years ago, I lived with my wife (we were dating back then) in a railroad-style two-bedroom that overlooked a squeaky tram line. The place had a shoebox of a kitchen, which was nutty considering how much we cooked. 

Even by Italian standards, my wife is an amazing cook. All manner of Italians would show up at the door a few times a week, and we’d go late into the evening talking. This was my early education on life in Italy, lessons I ate up.

Around that time, at some point in that first year, I cut out a cartoon from The New Yorker and taped it to our refrigerator door. You may remember this one. It came from the genius mind of cartoonist Charles Barsotti—a delighted piece of rigatoni pasta is on the phone and, apparently on the other end is his good friend. “Fusilli, you crazy bastard! How are you?” he says, with a giant grin. When Barsotti died in 2014, the cartoon showed up a lot in tributes.

I asked my daughter, M., to sketch it out. Here’s her tribute. 

Back then, friends would wander into our kitchen, I recall, and stop to examine the cartoon. It became a little conversation piece. Most everyone laughed, but I always wanted to know what they found so humorous.

It’s a piece of rigatoni. On the phone, some would say. 

To me, the comic genius is that Mr. Rigatoni is talking to Mr. Fusilli. You have to admit, I’d say, fusilli is a zany pasta.

The Italians, by and large, didn’t see it that way. Fusilli is a serious pasta, a few pointed out. My father-in-law, incidentally, found the whole cartoon objectively un-funny. The joke among family and friends eventually became that yours truly, a Martian in Rome, found fusilli, ahem, cartoonish.

My kids, too, find the cartoon more odd than funny.

And, so I’ve kinda come to see in fusilli a pasta that represents one of those cultural gaps in Casa Warner that, as a family, we’ll probably never overcome. I’m okay with that. Fusilli still cracks me up.

Bernhard Warner

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Market candy

Quote of the day

There tends to be solid growth in the first year of the hiking cycle, with an average return of +7.7% after 365 days.

That's Deutsche Bank equities analysts detailing in an investor note on Monday what the past tells us about future stocks-performance as the Fed tightens monetary policy. A reminder: past performance... Yep, you know the rest.

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