5 Things You Need to Know to Start Your Day

The US yield curve inverted, FedEx warns of a slowdown and Ether becomes a sell-the-news event.The US yield curve continues to invert, with [View in browser]( [Bloomberg]( The US yield curve inverted, FedEx warns of a slowdown and Ether becomes a sell-the-news event. Yield curve inverts The US yield curve continues to invert, with some predicting it could have [much more to go](. Allspring Global Investments see the 2-year versus 10-year yield curve hitting negative levels not seen since the 1980s. Meanwhile, the dollar continues its ascent, with Citigroup viewing it as the [only possible hedge]( for what’s turning into the biggest destruction of shareholder value since the global financial crisis. The [pound marked]( Black Wednesday with a drop to the lowest since 1985. Corporate slowdown FedEx withdrew its earnings forecast on [worsening business conditions,]( dragging the broader market down in a potentially worrying sign for the global economy. The package-delivery giant flagged weakness in Asia and challenges in Europe and said conditions could deteriorate further in the current period. General Electric’s finance chief warned that [supply-chain challenges](are weighing on its third-quarter performance. The global economy may face a recession next year caused by an aggressive wave of policy tightening that could yet prove inadequate to temper inflation, the [World Bank]( said in a new report. Sell-the-News Ether led [digital assets]( lower after a groundbreaking software upgrade of the token’s underlying network turned into what some market observers labeled a “sell-the-news” event. Ether is paring a rally since mid-June sparked in part by optimism about the Ethereum update -- the Merge -- to slash the network’s energy use. Crypto prices have tumbled this year along with other riskier investments, weighed down by monetary tightening. The Merge, however, is viewed as a potential longer term catalyst for Ether as it improves the environmental profile of Ethereum. Stocks drop Equities [extended declines](on Friday, with an index of global stocks on track for the worst week since June. S&P 500 futures fell 1% as of 6:06 a.m. New York time, suggesting the selloff that drove the cash index to its lowest close in about two months on Thursday isn’t over. European stocks dropped a fourth day. Policy-sensitive two-year Treasury yields extended a rise to the highest since 2007. A dollar index soared to a fresh record, reflecting bets for outsize Federal Reserve interest rate hikes. Coming up... University of Michigan data at 10 a.m. will be parsed for clues on inflation expectations. Other reports include Baker Hughes US Rig Count. Market participants could face additional volatility from the quarterly expiry event known as triple witching, with contracts for stock index futures, stock index options and stock options all expiring, while re-balancing of major equity indexes also takes place. What we've been reading Here's what caught our eye over the past 24 hours. - [China’s economy]( shows signs of recovery. - [Trump documents]( will be reviewed by retiring judge. - [Uber probes](hacker’s claim to have penetrated key databases. - Germany seizes [Rosneft assets.]( - World’s $1 trillion [La Nina](problem. - Orderly queue for [Queen Elizabeth II]( as Britain [shuts for funeral.]( - [Roger Federer]( isn’t going anywhere. And finally, here’s what Katie’s interested in this morning What do Elon Musk, Cathie Wood and Jeffrey Gundlach have in common? In the multiverse of potential answers, at least one involves a shared belief that the Fed risks raising rates too aggressively. Tesla chief executive Musk tweeted this month that a major Fed hike risks deflation, to which Ark Investment founder Wood replied that such a contraction is “[in the pipeline](.” While that exchange took place before Tuesday’s report that inflation jumped by 8.3% in August from a year earlier, Musk doubled down on Wednesday, saying that the Fed should [cut rates]( by 25 basis points. DoubleLine Capital chief investment officer Jeffrey Gundlach didn’t go as far, but he did say on CNBC this week that he would prefer that policy makers [dial back]( to a quarter-point hike. His concern is that the Fed will overshoot in its bid to curb the worst inflation in a generation, and not enough time has passed to see what impact the Fed’s jumbo-sized hikes will have on the economy. The market is leaning heavily against the unlikely trio. After Tuesday’s stronger-than-expected inflation print, the possibility of a 100-basis point hike entered the conversation, with odds of such a move jumping by 20% in the aftermath of the report. Pricing has eased in the days since, but a one-percentage-point hike -- which would be the largest since the 1980s -- “has to be [on the table](,” said Diane Swonk, chief economist at KPMG. In any case, Wood is “walking the walk,” as Bloomberg Intelligence’s Athanasios Psarofagis said. Ark Investment went on its biggest [dip-buying]( binge since February on Tuesday, snapping up shares in 27 different companies across the firm’s eight exchange-traded ETFs on a day when the Nasdaq 100 suffered its biggest drop since March 2020. Follow Bloomberg's  Katie Greifeld on Twitter [ @kgreifeld]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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](