“In investing, there is nothing that always works, since the environment is always changing, and investors’ efforts to respond to the environment cause it to change further ― Howard Marks

1. Russia to Cut Gas to Poland and Bulgaria, Making Energy a Weapon — Russia will cut off the gas to Poland and Bulgaria on Wednesday in a major escalation in the standoff between Moscow and Europe over energy supplies and the war in Ukraine. Moscow is making good on a threat to halt gas flows to countries that refuse President Vladimir Putin’s new demand to pay for the fuel in rubles. The European Union has rejected the move in principle but now payment deadlines are starting to fall due, governments across Europe need to decide whether to accept Putin’s terms or lose crucial supplies — and face the prospect of energy rationing.
2. Fidelity to Allow Retirement Savers to Put Bitcoin in 401(k) Accounts — employees won’t be able to start adding cryptocurrencies to their nest eggs right away, but later this year, the 23,000 companies that use Fidelity to administer their retirement plans will have the option to put bitcoin on the menu. The endorsement of the nation’s largest retirement-plan provider suggests crypto investing is moving further into the mainstream, but it remains to be seen whether employers will embrace it for their workers. Under the plan, Fidelity would let savers allocate as much as 20% of their nest eggs to bitcoin, though that threshold could be lowered by plan sponsors. Mr. Gray said it would be limited to bitcoin initially, but he expects other digital assets to be made available in the future.
3. U.S. GDP Drops 1.4% as Economy Shrinks for First Time Since Early in Pandemic — U.S. gross domestic product shrank at a 1.4% annual rate in the first quarter as supply disruptions weighed on the economy, though solid consumer and business spending suggest growth will resume. The decline in U.S. gross domestic product marked a sharp reversal from a 6.9% annual growth rate in the fourth quarter. The drop also marked the weakest quarter since spring 2020, when the Covid-19 pandemic and related shutdowns drove the U.S. economy into a deep—albeit short—recession. The drop in GDP stemmed from a widening trade deficit, with the U.S. importing far more than it exports. A slower pace of inventory investment by businesses in the first quarter—compared with a rapid buildup of inventories at the end of last year—also pushed growth lower. In addition, fading government stimulus spending related to the pandemic weighed on GDP.
4. Russia Makes Bond Payment In Dollars To Avoid Default — Russia said it had made payments on two dollar-denominated bonds, potentially staving off a default on the country’s foreign debt. The nearly $650 million in payments were made in dollars to a London branch of Citigroup Inc. that processes payments on behalf of bondholders, Russia’s finance ministry said Friday.
The money from Russia’s bond payments must land in bondholders’ accounts by Wednesday, the end of a 30-day grace period after Russia missed a payment in early April. Otherwise, the country can officially be called in default by its creditors.
5. Inflation Rises to Four-Decade High — Consumer prices rose 6.6% in March from a year before, up from February’s revised 6.3% increase, as measured by the Commerce Department’s personal-consumption expenditures price index. The March rise was the fastest since January 1982. The so-called core PCE index—which excludes volatile food and energy prices—increased 5.2% in March from a year earlier, down from a revised 5.3% in the year through February. On a monthly basis, core prices rose a seasonally adjusted 0.3% in March from the prior month, the same as the revised 0.3% increase in February. That was down from the 0.5% monthly pace in each of the prior four months—a mild slowdown that hinted broad price pressures might be starting to ease.

The week ahead — Economic data from Econoday.com: