5 things to start your day

Powell testimony, mixed pandemic developments, and strategists suggest buying the dip. Powell With global markets turning on the outlook for [View in browser]( [Bloomberg]( Powell testimony, mixed pandemic developments, and strategists suggest buying the dip. Powell  With [global markets turning]( on the outlook for [Federal Reserve policy](, there will be very close attention paid to Fed Chair Jerome Powell’s answers to questions from the Senate Banking Committee today. While the hearing is about his re-confirmation as chair, all ears will be on his comments as the central bank is set for its sharpest turn toward [monetary policy tightening]( in decades. In his prepared remarks, Powell said the Fed will prevent higher inflation from [becoming entrenched](, without mentioning any specific policy actions. Also in Fed news, Vice Chair Richard Clarida said he would [resign from the board]( on Friday, two weeks earlier than previously expected. Omicron China locked down [5 million people living in the city of Anyang]( after two cases of omicron were reported there. Hong Kong is reportedly set to ban passengers from designated high risk countries from [transiting through its airport](. In Spain, the prime minister called for a debate to consider Covid [to be endemic](, meaning it would be monitored more like a flu. U.K. Prime Minister Boris Johnson, meanwhile, is facing opposition calls to resign as allegations emerge about a [rule-breaking party]( at his official residence. The U.S. Centers for Disease Control and Prevention [advised against travel to Canada](, while a record wave of school closures in the U.S. seems [set to abate](. Pfizer Inc. is developing a hybrid vaccine that combines its original shot with a formulation that [shields against]( the highly transmissible omicron variant. Opportunity?  Despite the far-from stellar start to the year for many financial assets — with [stocks, bonds]( and [crypto]( coming under pressure — analysts do see some opportunities. Strategists from Goldman Sachs Group Inc. to UBS Global Wealth Management remain [bullish on equities](, saying stocks can weather higher interest rates. There’s similar sentiment at JPMorgan Chase & Co., where Marko Kolanovic said in a note to clients that the pullback in risk assets is “[arguably overdone](.” Optimism is particularly high for [European equites]( as central bank policies seem set to diverge this year. Markets rise In global equites today there are some signs of that optimism with the volatile start to the week calming. Overnight the MSCI Asia Pacific Index slipped 0.1% while Japan’s Topix index closed its first trading session of the week 0.4% lower. In Europe, the Stoxx 600 Index had gained 1.1% by 5:50 a.m. Eastern Time with every industry sector rising. S&P 500 futures pointed to [plenty of green at the open](, the 10-year Treasury yield was at 1.753%, [oil rose to $79.40 a barrel]( and gold was higher. Coming up... Today’s economic calendar is dominated by Federal Reserve speakers. Powell begins his testimony at 10:00 a.m. Ahead of that, Cleveland Fed President Loretta Mester speaks to Bloomberg Television and Kansas City Fed President Esther George also discusses the economic outlook at a separate event. The EIA is scheduled to release the short-term energy outlook. The U.S. sells $52 billion of 3-year notes at 1:00 p.m.  What we've been reading Here's what caught our eye over the last 24 hours. - [50 companies to watch]( in 2022.  - Wary global bond markets brace for the [supply floodgates to open](.  - The cryptocurrency behind the popular (3,3) meme is [getting clobbered](. - Dalio says the U.S. needs a dose of China’s [common prosperity](. - Hong Kong’s [brain drain]( worsens. - As Mideast rivalries cool, leverage [begins to shift](. - U.S. surgeons transplant [pig heart]( into human patient. And finally, here’s what Joe’s interested in this morning At the end of last year, we interviewed [Jon Turek]( for the [Odd Lots podcast](, and part of the discussion had to do with the market coming to terms with the possibility of four rate increases in 2022. He noted that at four hikes, there was a certain symmetry to possible deviations, and that there would be a very high bar for even more aggressive action. But the narrative is already shifting at the start of the year. [Although still very modest in the actual market](, some bets are being placed on more than four hikes in 2022. And yesterday former NY Fed Chief Bill Dudley said the Fed [needs to get a lot more hawkish]( than it already is to tame inflation. Also yesterday, [Jamie Dimon said in an interview](, “I’d personally be surprised if it’s just four increases... Four increases of 25 basis points is a very, very little amount, and very easy for the economy to absorb.” Through six days of trading so far this year, the S&P 500 is off 2%, and the NASDAQ is down 4.5%. Meanwhile, rates across the curve have shot up. Perhaps there’s some jitters out there about a scenario where the Fed hikes at a much faster pace than we’ve become accustomed to. All that being said, it’s striking how hard it can be to map macro onto risk assets. If you had known at the start of 2021 that CPI would end the year near 7%, and that the Fed would be looking at four hikes and balance sheet reduction in 2022, would you have bet on gains of roughly 30% for the year? Seems unlikely. Follow Bloomberg's Joe Weisenthal on Twitter [@TheStalwart]( Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. Follow Us Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. You received this message because you are subscribed to Bloomberg's Five Things - Americas newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](