10 things before the opening bell

Happy Wednesday, readers. Let's talk lumber. After a huge rally during the pandemic, the commodity is coming back down to earth.

Here we go.

If this was forwarded to you, sign up here. Download Insider's app here.

1. Mortgage rates and inflation are crushing lumber demand. Prices for lumber fell more than 6% Tuesday, notching a new low for 2022. Demand in the housing market has cooled amid historic inflation and rising interest rates.

The building commodity has suffered while the 30-year fixed mortgage rate has surged above the 5% level. Buying a home is less affordable now — and it's led to a precipitous 40% decline in year-over-year mortgage applications as consumers wait for home prices to deflate. Heat coming out of the housing market means homebuilder activity is also coming down, putting downward pressure on the price of building materials like lumber.

Inflation at 40-year highs, meanwhile, means people aren't springing for home improvement projects the way the had during the pandemic, further impacting lumber demand.

Finally, capacity improvements in railroad availability, especially in western regions, have helped untangle a supply chain bottleneck that the lumber market had to navigate in 2021, further easing pricing pressures.

Lumber prices are down 39% from their March high of $1,357 per thousand board feet, and are down 52% from its May 2021 peak of over $1,700.

In other news:

2. US stock futures have bounced back this morning. Analysts say there's cause for optimism in yesterday's consumer inflation data, even as crude oil tops $100 a barrel. Here's what's happening on the markets.

3. Earnings on deck: JPMorgan, Delta Airlines, Bed Bath & Beyond, BlackRock, and First Republic Bank, all reporting.

4. Morgan Stanley revealed which sectors have historically done best as high inflation peaks. Strategy chief Mike Wilson shared which four sectors he's eyeing as earnings season arrives — and named seven stock picks for investors to consider right now.

5. "Big Short" investor Michael Burry warned US stocks are heavily overvalued and poised to tumble. The Scion Asset Management boss highlighted the price-to-sales ratio of the S&P 500 equal-weight index, which has nearly doubled in the past decade — and Burry is no stranger to calling epic crashes.

6. "King Dollar" isn't in danger of losing supremacy to the yuan or cryptocurrencies, according to a chief economist. Harvard fellow Megan Greene wrote that the dollar's trading dominance makes other currencies unlikely to supplant it as the preferred means of transacting. "The reality is the dollar can't be avoided."

7. A hedge fund that made $700 million on its GameStop bet is now chasing down unloved oil and gas stocks. Senvest Management is anticipating strong gains in the energy sector — see which companies make up its two biggest positions.

8. This wealth manager runs one of the largest and best-rated firms in the US. He broke down how he's advising clients on the state of the housing sector today, and what they should own. Plus, he shared his prediction for when the market will cool off.

9. Four industry pros weighed in on the benefits of building positions in crypto for long-term retirement accounts. Those who use a tax-advantaged account to invest in crypto could see exponential growth as early adopters, said one expert. But there's still a chance that the digital tokens remain a long-shot bet.

10. In March, inflation surged to its fastest rate since 1981. Food and energy prices skyrocketed, and the CPI hit 8.5%. The Russia-Ukraine conflict has boosted inflation by lifting prices for gas and other key commodities. Dig into the data here.

Keep up with the latest markets news throughout your day by checking out The Refresh from Insider, a dynamic audio news brief from the Insider newsroom. Listen here.

Curated by Phil Rosen in New York. (Feedback or tips? Email prosen@insider.com or tweet @philrosenn.)