5 Things You Need to Know to Start Your Day

Federal Reserve’s Jerome Powell eyes Capitol Hill, Credit Suisse loses a key backer and cash reigns supreme among investors. — Kristine Aqui [View in browser]( [Bloomberg]( Federal Reserve’s Jerome Powell eyes Capitol Hill, Credit Suisse loses a key backer and cash reigns supreme among investors. — [Kristine Aquino]( To catch up on the trading day in the UK and Europe, [check out Markets Today](. Powell preview In testimony to lawmakers this week, [Fed Chair Jerome Powell is expected to echo]( fellow central bankers in suggesting interest rates will go higher than policymakers anticipated just weeks ago if economic data continue to come in hot. Traders are betting the Fed will hike rates beyond the 5.1% level officials estimated in December. A hawkish tone from Powell, when he appears before a Senate panel on Tuesday and a House committee Wednesday, will likely prompt pushback from progressives warning the Fed not to inflict undue pain on the labor market. Credit Suisse, UBS Harris Associates, Credit Suisse’s biggest shareholder for many years, [sold its entire stake in the lender](. After cutting its 10% holding to 5% toward the end of last year, the firm exited its investment over the past three to four months, Chief Investment Officer David Herro said in an email. Separately, [UBS cut employee bonuses](for last year by 10% while simultaneously boosting pay for Chief Executive Officer Ralph Hamers. The bank’s compensation awards cap an uneven year, with a roughly 50% decline in advisory and capital markets offsetting gains in trading and inflows in wealth management. Cash is king [In 2023, cash is far from trash](— that’s the verdict of the 404 professional and retail investors who took part in the latest MLIV Pulse survey. Against a backdrop of uncertainty over continued Fed rate hikes and a looming recession, cash looks like a safe haven — particularly with yields on short-term Treasury bills high enough to beat the classic 60/40 portfolio of stocks and bonds for the first time since 2001. “We’re encouraging people that it’s okay to hold cash, that it’s not just a lead weight on your ankle weighing you down,” said Leo Kelly, chief executive officer at Verdence Capital Advisors. Cautious markets S&P 500 and Nasdaq 100 futures edged lower as of 5:40 a.m. in New York. The Bloomberg Dollar Spot Index recovered from the day’s lows, pressuring most Group-of-10 currencies. Treasuries eked out small gains, mirroring moves in global bond markets. Oil, gold and Bitcoin fell. Coming up… At 10 a.m., we’ll get factory orders and durable goods data. At 11:30 a.m., the US will sell $57 billion of 13-week bills and $48 billion of 26-week bills. The CERAWeek energy conference starts in Houston, while earnings include Nutanix and Trip.com. What we’ve been reading Here’s what caught our eye over the weekend: - [Tesla slashes prices]( of some models in the US for a second time this year - [A price war among electric vehicle makers]( in China takes its toll - An online upstart is coming for[Shein’s lead in the US market]( - [Apple prepares its new range of Macs](, including a new iMac - [A scarcity of dollars]( sends the world’s riskiest markets toward crises - [China’s cautious growth target]( signals a smaller boost to world economy - [How Citadel harnessed the weather]( to dominate the hedge fund world And finally, here’s what Joe’s interested in this morning On the brand new episode of the Odd Lots podcast, [we speak with Brian Armstrong](, CEO of Coinbase, the pre-eminent crypto exchange in the US. It's a conversation that covers a lot of ground, on the big challenges facing his industry right now. First there's the big bear market, as prices have come down precipitously over the last year or so. And then, as these things tend to go, the sheriffs start showing up after the price plunge, suing bad actors, and putting a further chill on industry activity. Nobody knows how far the regulatory crackdown will go, but the consensus is that law enforcement activity of various flavors has picked up quite a bit, particularly in the wake of FTX. With crypto obviously, the whole thing runs on narratives. And different narratives serve different prospective buyers. For some in retail, tokens serve as a gateway to a new decentralized web(3) where they'll own their activity, and avoid large, centralized players. For institutional investors, crypto was pitched for a while as a portfolio diversifier. And Bitcoin specifically was pitched as an inflation hedge. And neither of those things have come to pass really. You can manipulate these charts all you want, but whether we're looking at Ethereum (purple) or Bitcoin (orange), they basically have just traded like the ARKK ETF over the last 5 years. No diversification. No inflation protection. In our chat, Brian did express surprise that Bitcoin specifically didn't perform better over the last few years as a true inflation hedge. And his answer was that well, as an asset, it must still be too small to have distinct macro properties from the rest of the market. Maybe it has to grow further. But when thinking about when we'll see institutional money pouring again, obviously there's a lot of dark legal clouds. But also money chases price. And as long as the coins look mostly like high-beta tech stocks, for many investors the distinct appeal may be limited. Check out the episode on [Apple](, [Spotify]( and [YouTube](. Follow Bloomberg's Joe Weisenthal on Twitter [@TheStalwart](. Follow Us You received this message because you are subscribed to Bloomberg's Five Things to Start Your Day: Americas Edition 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](