Last week we said sell the news on the Iran war. We did. We dumped our oil stocks that ran up in anticipation of the Iran war despite the fact that oil prices keep spiking. The continuation in oil prices spiking, is now hurting stocks and assets that have energy or inflation as a big input.
Read consumer stocks and long bonds in particular.
The most sensitive industries are those where costs are linked to oil prices (such as airlines and cruise lines) and discretionary consumer retail stocks, not Walmart or Loblaws because people still need to eat.
It’s the clothing retailers (VFC) that have increased transport costs and a weaker consumer dollar (be mindful of those where tariffs play a big factor as well). On the fixed-income side, long bonds (TLT) worry most about inflation and declined more than 2 per cent last week. Like Wayne Gretzky used to say, skate to where the puck is going, not to where it’s been.
