Good Morning,
I hope everyone had a great weekend. It’s supposed to warm up towards the end of the week with Saturday getting into the 60’s! Spring is near.
Markets are experiencing some volatility this morning after the strikes on Iran over the weekend. Oil is up as the Strait of Hormuz, a critical shipping lane that moves ~20% of global oil, is severely disrupted. OPEC+ is considering increasing oil production so we will have to see how this develops. In general, the overall market fallout appears relatively contained in my opinion but again, time will tell as the conflict unfolds. This all comes on the heels of hotter than expected inflation numbers from last week that brought into question the likelihood of interest rate cuts. Markets are still pricing in ~2.3 rate cuts this year with the first bring in July. I think much of the volatility we are seeing this morning is stemming from uncertainty as opposed to a fundamental breakdown. That being said, I would exercise patience and would anticipate dips turning into valuable buying opportunities. This week we get both the February jobs and retails sales numbers on Friday. Overall, corporate earnings remain healthy and the foundation for stock prices going forward. The value narrative remains appealing as we wait for geopolitical clarity in the days/weeks ahead. Please continue to reach out with any questions/comments.
Attached, please find this week’s Market Strategy Radar Screen Report from John Stoltzfus, Chief Investment Strategist of Oppenheimer Asset Management.
Have a great week!