Oil, inflation and the Fed are all pulling on the market at once, and Nvidia’s CEO stepping down has added to a bumpy finish to the week. Johny Fernandez is joined by Ted Parkhill, CEO of Incline Investment Management, to discuss what it all means for investors.
Parkhill says headlines drive the markets from one Monday to the next, and that his firm does not trade them or try to make predictions. He says the market is trying to price both a de-escalation with Iran and unresolved energy supply chains, and that he does not think the oil trade is over. He argues inflation is stickier than people think because prices rise fast at the pump and the store but fall slowly, and says that kind of volatility can benefit a trend-following strategy like his.
On rates, Parkhill says bonds are no longer the defensive move they were for 40 years, and that if yields keep rising, being short global bonds is a natural trade for his firm. He also says Nvidia could be the tip of the iceberg, that the AI trade gets more expensive with rising borrowing costs, and that investors should look for non-correlated solutions that can smooth out a portfolio.