Is there cause for optimism around equities heading into the fourth quarter? Sure. Is there nevertheless some serious risk in the overall setup? Yes. Should we, even if the optimists have it right, anticipate some serious volatility in Q4? Absolutely!
Ironically, much of the stuff that allows for optimism is the stuff that defines much of the risk as well.
Rising jobless claims (362k this morning vs 351k last week vs 335k the week before) fly directly in the face of evidence that says the economy's expanding.
Well, actually, maybe not.
Treasury yields are taking a bit of a breather after seeing quite the spike over the past week or so.
Our agriculture futures ETF now occupies a not-small position in our core portfolio. An article published this morning by Bloomberg titled The Country That Makes Breakfast for the World Is Plagued by Fire, Frost and Drought tells of why unpredictable weather patterns (disrupting production/sparking higher pricing) are a key part of our thesis:
So equity markets are feeling the jitters this morning. Question is, over what?
Well, in DC, well, it's a mess... Here's Bespoke Investment Group summing it up in their morning note:
Here's a snip from our July 14th of this year post (oil was $54 a barrel that day):
"As clients and regular readers have noticed, we remain bullish (long-term) on energy -- and I'm not talking just renewables right here.
In a nutshell, fossil fuel markets have seen massive capital expenditure reduction of late -- with the expectation of more cuts to come. I.e., we're talking less capacity to produce to an extent that we think massively overcompensates for the go-forward reduction in demand due to the adoption in renewables."
It's $74 this morning!
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Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.
