Why surging oil prices may not derail the consumer trade
Wall Street is already looking beyond Big Tech’s quarterly results.
While it’s a big earnings week for the group, YieldMax chief strategist Mike Khouw says: consumer staples And optional There are names that are at the top of the watch list, especially due to the effects of the Iran war.
“The biggest impact [the] Khouw, who is also a CNBC contributor, said on CNBC’s “ETF Edge” this week that the consumer checkbook will be felt at the pump.
Khouw, who lives in California, cited the Golden State, where the oil shock was felt most harshly, as an example.
The average price of unleaded gasoline in the state as of Wednesday is about $5.98 per gallon, according to AAA. This is roughly 41% above the national average; reached a new record for this year.
Despite the pressure from rising energy costs, Khouw would still own consumer shares.
“No matter how bad things are geopolitically, you would expect diapers and toilet paper to continue to sell,” he said.
Khouw is also constructive on the consumer discretionary side, with recent data reflecting resilience among consumers. The latest CNBC/NRF Retail Monitor data shows retail sales increased in March sixth month in a row.
“This is actually one of the areas where we continue to see better results from the gains and upside flows that we’re seeing,” he said. “I think people are looking at this area, thinking maybe some of these things are getting some punishment and maybe there will be light at the end of the tunnel.”
Paisley Nardini of Simplify Asset Management also focuses on non-Big Tech trades.
“We have some of our flagship solutions in energy, oil and broader commodity markets that are long and short,” the firm’s head of multi-asset solutions said in the same interview.
on wednesday, WTI crude futures rose more than 7% and Brent crude oil It rose more than 6 percent on new concerns that Iran’s Strait of Hormuz would see a prolonged closure.
