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5 things to know before the stock market opens Monday

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Raphael Bostic at Jackson Hole, Wyoming
David A. Grogan | CNBC

Here are the most important news items that investors need to start their trading day:

1. Bad start for stocks

Stocks are still in a funk. The three major indices were down Monday, indicating that last week’s troubles would continue. On Friday, the Dow hit a new intraday low for 2022, while the S&P 500 briefly went below its June low. Investors are trying to figure out how to play the Federal Reserve’s aggressive plan to fight inflation with rate hikes. Right now, the central bank’s benchmark rate sits at 3% to 3.25%, but policy makers said they could raise the rate as high as 4.6%, and fairly soon, to bring inflation down. Markets are also digesting comments from Atlanta Fed President Rafael Bostic, who told CBS’ “Face the Nation” that he expected some job losses pain from the Fed’s campaign against price increases – “smaller than what we’ve seen in other situations.”

Read more: International currencies slide

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2. A new tax bill for corporate giants

An Andy Warhol-like print of Berkshire Hathaway CEO Warren Buffett hangs outside a clothing stand during the first in-person annual meeting since 2019 of Berkshire Hathaway Inc in Omaha, Nebraska, U.S. April 30, 2022.
Scott Morgan | Reuters

Amazon and Warren Buffett’s Berkshire Hathaway would likely pay the most under the new corporate minimum tax, according to a study from the University of North Carolina Tax Center. The researchers used corporate earnings from 2021 as a test case, and found that the tax would affect 78 companies, also including Ford and AT&T. The new tax, which President Joe Biden signed into law along with the rest of the Inflation Reduction Act in August, is intended to target companies that earn over $1 billion in a year. Overall, the UNC research shows that the tax would have reaped $31.8 billion in 2021. A similar study, from the nonpartisan Joint Center for Taxation, had said the tax would affect 150 companies and harvest $34 billion in revenue. Read the UNC study here.

3. Italy’s rightward shift

The political leader of the Brothers Of Italy, Giorgia Meloni.
Marco Cantile | Lightrocket | Getty Images

Europe is already dealing with a great deal of upheaval, between Russia’s war in Ukraine and the resultant energy price inflation. Italy’s voters just added another complication to the list: the rise of Brothers of Italy, a far right political party that grew from the neo-fascist movement left behind after Benito Mussolini’s death during the final months of World War II. The party’s leader, Giorgia Meloni, is also poised to become the nation’s first female prime minister under a broader center-right coalition. She claims the party has ridded itself of fascist elements, and it seeks to make the European Union less bureaucratic. Critics warn, however, that Meloni’s government could be more confrontational with European leadership and end up relegated to a second tier of leadership within the bloc.

4. ‘The consequences would be horrific’

Ukraine’s President Volodymyr Zelenskyy speaks during an interview with Reuters, amid Russia’s attack on Ukraine, in Kyiv, Ukraine September 16, 2022.
Valentyn Ogirenko | Reuters

Russian President Vladimir Putin said he wasn’t bluffing when he warned last week that he could unleash nuclear weapons in his war on Ukraine. Volodomyr Zelenskyy, the president of Ukraine, believes him, too. “He wants to scare the whole world. These are the first steps of his nuclear blackmail. I don’t think he’s bluffing,” Zelenskyy said on CBS’ “Face the Nation. Western governments are taking the threat seriously, as well. “The consequences would be horrific,” U.S. Secretary of State Antony Blinken also told CBS. Elsewhere in the war, separatists were pushing widely criticized votes to annex parts of Ukraine for Russia, while protests continued in response to Putin’s decision to call up hundreds of thousands of reservists in a bid to rescue his failing war. Follow updates here.

5. Blue clues

Pirated 21 million timesTwelve years after the release of “Titanic,” Oscar-winning director James Cameron returned to movie theaters with the science-fiction epic “Avatar.”
Twentieth Century Fox

“Avatar” changed the moviegoing world when it was released in 2009, showing just how important the Chinese and international box offices had become for Hollywood. For years, audiences wondered when a sequel would come, and we’re finally getting one, “The Way of Water,” this December. To gauge interest in James Cameron’s next eco-sci-fi epic, Disney – which bought “Avatar” studio 20th Century Fox during the period between releases – rereleased the original movie in theaters this past weekend. It was shown in 3D, which had largely fallen out of favor, in premium-priced Imax theaters. The movie’s international haul of about $20 million showed the franchise still has muscle overseas. But its domestic gross of about $10 million wasn’t so convincing to box office experts. “We can’t confidently say the audience turnout here provided enough of a litmus test on exclusive 3D rollouts given how rereleases, in general, have performed in recent years,” said Shawn Robbins of BoxOffice.com.

Read more: Who’s the most powerful person in Hollywood? Bryan Lourd is a good answer.

– CNBC’s Tanaya Macheel, Jack Stebbins, Natasha Turak, Matt Clinch and Sarah Whitten contributed to this report.

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