Good morning. I’m Phil Rosen.
My favorite part of this job is getting the opportunity to speak to interesting, smart people — especially when I get to share their insights here in this newsletter.
Today, I’m sharing my conversation with Matt Smith of commodities analytics firm, Kpler.
Matt Smith is the lead oil analyst at Kpler. This conversation has been lightly edited for length and clarity.
Phil Rosen: This week the EU has new sanctions and a price cap kicking in on Russian oil products, such as diesel. What’s the impact here?
Matt Smith: It seems like they’re going to play out in a very similar way to the December sanctions, in that Russian volumes are not going to drop off materially by any means, but instead be rerouted elsewhere.
And it seems like the price cap is going to be inconsequential as well. What did we see with the LNG side of things? The price cap was set and it was so high that it was irrelevant anyway. From everything we’ve seen, the price caps are a moot point.
If Europe stops importing diesel from Russia, where could those volumes go instead?
MS: One of two things is going to happen. Either the diesel may be consumed in Africa, or we may see a pickup in diesel exports from Africa into EU-27 countries.
How do the new sanctions impact Russia’s status as a world power?
MS: They’re one of the leading producers and leading exporters in the world, so we shouldn’t expect that to change. What will influence this is how long this war goes on, and how detrimental that is to its energy industry.
It seems to me that the longer the war goes on and the lower their revenues, the more they will likely have to cut back on investment in production. But it’s very, very difficult to predict what’s going to happen, given how nothing has really changed, at least from a production and export perspective over the last year.
And here are the top stories from markets this week:
1. Gautam Adani lost $52 billion in six days. Adani’s net worth decline is the most serious in terms of scale and speed since Bloomberg first started tracking billionaires in 2012. This is over three times what FTX’s Sam Bankman-Fried lost in a similar time frame.
2. Forget ChatGPT — this AI-powered ETF is beating the market by nearly 100%. Equbot’s artificial intelligence ETF leverages IBM’s Watson supercomputer to make stock picks. The investment chief behind the fund said its current outperformance is only the beginning.
3. One man’s ego could plunge America into a recession. As Insider’s William Edwards writes, Federal Reserve chairman Jerome Powell could push the economy into a tailspin in a misguided attempt to safeguard his own legacy. Read the full story.
4. The dollar’s dominance is under fire. Russia and Iran are planning a gold-backed stablecoin, while Brazil and Argentina are exploring a shared currency. Here are the biggest rising threats to the greenback’s status in global trade.
5. “Big Short” investor Michael Burry issued a grave one-word warning to investors: “Sell.” Shortly after writing the ominous tweet, the legendary market-watcher deleted his Twitter.
6. Is bitcoin being manipulated? This professor who proved it in 2017 seems to think so. John Griffin told Fortune that there are red flags emerging that seem to suggest foul play: “In a period of highly negative sentiment, we’ve seen suspiciously solid floors under bitcoin.”
7. America’s biggest wealth manager told us four simple steps young people can start taking to reach their financial goals. Peter Mallouk is the CEO of Creative Planning, which manages $224 billion in wealth. Aside from a difficult housing market, he explained why young people have a great financial setup right now.
8. Buy these six cheap stocks now to take advantage of a perfect setup for contrarian investors. That’s according to a leading international fund manager — see his list of favorite names.
9. Warren Buffett’s 99-year-old business partner, Charlie Munger, thinks crypto is a terrible bet. He went even further, calling for the US to follow in the footsteps of China and ban it entirely. Munger cited the wild speculation, lack of regulation, and predatory nature of the sector.
10. An under-the-radar economic indicator is flashing a critical warning. Demand for cardboard boxes has dropped to levels not seen since the 2008 financial crisis. Here’s what you want to know.
Edited by Max Adams (@maxradams) in New York.