Russia has reduced its gas exports to Europe (again). Here’s what you need to know.

Well well well. If it is not yet Russian energy that moves the markets. I’m Phil Rosen, I’m from Los Angeles.

Moscow is reducing gas flows to Europe for the umpteenth time since the start of the war. Today we are going to go over what is happening and why there will definitely be more developments to come.

Let’s break it down.

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Vladimir Poutine

Mikhail Metzel/Sputnik/AFP via Getty Images

1. Russia’s Gazprom has again reduced gas flows from Nord Stream 1. It has been less than a week since the key pipeline restarted after maintenance.

From Wednesday, the state-run energy giant said it would cut flows to 20%, after it was already moving at only 40% previously.

The pipeline had restarted on Thursday after being shut down for 10 days to retool, and European officials have accused Moscow of weaponizing the energy in retaliation for wartime sanctions.

Gazprom said on Monday a second turbine would be taken out for maintenance, although Germany said there was no technical reason for a reduction in flows.

Natural gas futures in Europe soared 10% when the news broke on Monday.

All the while, Russian oil exports have fallen for five straight weeks. These shipments are down 13% since mid-June as Asian customers slow down their purchases.

A four-week rolling average shows shipments have fallen by 480,000 barrels per day since the middle of last month, according to Bloomberg data. As a result, Moscow’s revenue from export duties fell from $168 million to $155 million.

It should be noted that Asia’s largest oil refiner has reduced its purchases of Russian crude, as it is unwilling to match the higher prices offered by customers in India and elsewhere.

Last week, Bloomberg reported that crude shipments from Russia to China and India had fallen 30% from their wartime peaks.

In other news:

Federal Reserve Chairman Jerome Powell

U.S. Federal Reserve Board Chairman Jerome Powell speaks during his hearing on Senate Banking, Housing, and Urban Affairs Committee renominations on Capitol Hill in Washington, U.S., on January 11, 2022.

Brendan Smialowski/Reuters

2. US stock futures fall early Tuesday, as the two-day meeting of the Federal Open Market Committee begins. The Fed’s interest rate decision is due tomorrow and investors expect another 75 basis point hike. Here are the latest market movements.

3. On file: Microsoft Corp., Alphabet and McDonald’s Corp., all filers.

4. Goldman Sachs recommends this set of stocks to take advantage of their ever-expanding yields. Some companies still have gains ahead even though returns on equity may have peaked, analysts at the bank said. See their 17 names here.

5. The Fed will eventually choose to support growth rather than fight inflation, according to BlackRock. And the top asset manager predicts the central bank will cut rates next year after a period of excessive tightening. “We expect more volatility, so we are focusing on agile and tactical positioning.”

6. ‘Dr Doom’, who predicted the 2008 financial crash, said predictions of a mild recession are “illusory” as a severe financial crisis looms. Nouriel Roubini said debt ratios are historically high as bailouts during the pandemic have resulted in “zombie societies”. Everything he says goes against what the big Wall Street banks expect.

7. Coinbase faces SEC investigation into listings. According to Bloomberg, the crypto exchange is under investigation over whether it improperly let US customers trade digital assets that should have been registered as securities. Coinbase shares fell 4.8% in premarket trading on Tuesday.

8. It’s time to “back off” and buy stocks. That’s according to the chief strategist of an $8 trillion brokerage. She explained why investors should act now — and why the bear market presents a great opportunity to grab cheap stocks.

9. A senior economist says home prices are poised for a 2008-style crash. A perfect storm is brewing, said Jose Torres of Interactive Brokers, as housing construction soars and demand is crushed by rising mortgage rates. He explained why he expects to see something similar to what happened during the Great Financial Crisis.

inflation wage

Madison Hoff / Insider

10. The federal minimum wage of $7.25 just turned 13. Many states have since taken matters into their own hands and raised wages, but not all have done so. Today, as inflation continues to soar, the value of the minimum wage is at its lowest point in decades.

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Organized by Phil Rosen in New York. (Comments or advice? or tweet @philrosenn).

Edited by Max Adams (@maxradams) in New York and Hallam Bullock (@hallam_bullock) in London.

Mary I. Bruner