A Comment -- General Comments From an Expert (A Commentary)

When you look across the different sets of companies, the bottlenecks tend to move.

AI is the biggest cross-sectional theme we're seeing across the entire market. But where you look under the hood step-by-step, and how that value capture changes, is a lot more important than it used to be.

Here's a simple example. All the excitement has been on memory stocks. But NVDA has seen a lot of relative de-rating, trading at huge discount. The pendulum swinging from where you are in the bottleneck, and all the way back to the core bundler, is an example of what you're seeing in the stock market as a whole.

Geopolitical shocks always create market dislocations. This one, the US-Israel-Iran war, won't last long, he thinks, nor will high oil prices be sustainable, he guesses. Only healthcare services is the only sector seeing job growth the last two years, given aging demographics, while the other sectors see flat or falling job growth. The US labour picture is very tentative. The next part of the cycle will be mass layoffs, not likely this year, but later, and persistent high oil prices could be a catalyst. The Canadian jobs picture isn't robust, either.

He doesn't know when the market will bottom, but the Tactical Risk Monitor does help him figure this out. But the 5,650-5,900 range in the S&P is likely were the S&P will correct into. The markets aren't yet oversold.

100% agree. The tone in the markets shifted in a way that's increasingly hard to ignore. The Iran conflict started as a backdrop, but is now feeding into how investors think about inflation, policy, and risk. Deadline for a peace deal with Iran is also weighing on markets.

Initially felt more like a recalibration. In the US you could see the adjustment unfold as oil prices moved higher, yields followed, and then equities (particularly the most-crowded growth areas). 

The path forward has inflation a bit stickier, and central banks have less room to ease. 

The peace deal deadline scheduled for Saturday has been extended by 10 days to April 6. Talks are ongoing, but both sides have big asks.

She's watching markets closely. Thinks markets will focus on the Strait of Hormuz and transportation of oil. If ships can pass through without fear of being attacked, that should provide a bit of relief to higher energy prices. What would also help is cessation of attacks both on Iran's neighbours and on Iran's energy facilities.

We're in wait-and-see mode. Lower energy prices should bring higher equity prices. That would reduce fears of higher prices flowing down into the economy, as well as fears of the conflict escalating and broadening.

At this point, no. Seeing pullbacks, which are normal and healthy. A pullback is defined as a decline of 5-9%, and they happen 3-4 times a year. 

Correction is defined as a decline of 10-20%. Those happen about once a year. 

Yes, these moves can create uncertainty. And that's the one thing that markets don't like. If we can get clarity or any sort of guidance that a peace deal will form, she can see markets taking off very quickly.

If the conflict is prolonged, that could create sticky inflation and cause interest rate cuts to be pushed down the road. We're not there yet, but she's certainly watching the impact on the economy.

Still likes it. The story has gone from more of a cyclical metal to a strategic asset -- electrification, data centres, EVs are all copper-intensive. We're headed into a structural supply deficit. That macro backdrop makes the whole space really compelling.

One of her favourite long-term themes.

She does hold cash, about 7-11% right now. If energy prices cause an economic slowdown or inflation becomes sticky, the current 7% market pullback could turn into 15-20%.

It depends on your equity exposure and risk tolerance. Would be a good time to start strategically picking up some international exposure, value names like financials, materials. But don't overpay for those things. Some stocks are down 15-30%, lots of opportunities out there to pick up half positions now.

She looks at fundamentals for what businesses she wants to be in. Use technicals to determine your entry point. For new $$ today, clients get 50-60% of their total equity target now; if someone's already at 50%, she'd have them up to 75%.

Go in by tranches/stages. If we're heading into a double-digit correction, it could be the only one we get for 2026.

That's right, yet we're living through the worst energy crisis in our lifetimes (even taking into account the 1970s). The complacency still in the oil market is astounding.

Let's put things in perspective. Middle Eastern production is down almost 11M barrels per day. Flows out of the Strait are down ~17M barrels per day. The last of the ships that were able to exit the Strait have now reached port.

So you're now starting to hear stories such as 500 gas stations in Australia shutting down because they've run out of gasoline. Some fish markets in Asia have no fish on the shelves because it's not economic for the fishers to go out anymore.

The real effects are just being felt today. The situation is dynamic, but if the Strait remains closed, and you look out 2-3 weeks from now, we will lose throughout 2026 (based on data from Energy Aspects) approximately 920M barrels of Middle Eastern production. That's more than we lost during Covid (so far the biggest demand shock in history).

The benchmarks don't yet reflect reality. Reality will hit very soon in the coming days and weeks.

We need to reach an oil price within about a month where you kill demand, because you're depleting stockpiles so quickly. Strategic petroleum reserve (SPR) releases are, at most, 4M barrels per day (but production is down 11M, and flows are down 17M).

There's no policy change you can enact to offset this mismatch. Once the SPR release is over, that's when it really blows up. To restore balance, you have to kill demand. Unfortunately for the global economy, the oil price for that is a shockingly high number of roughly $175 per barrel (when oil price reaches 5.5% of global GDP).

We're using up the safety buffers -- strategic releases, onshore storage, offshore storage. Those are all ending in the next several days to weeks. That's when the paper market will reflect the physical market.

There's all this talk that Trump will TACO this weekend, and everything will go back to normal. There is no normal to go back to. Consensus was that 2026 would face the biggest oil glut in history, and oil would fall to $40. In the next 3 weeks, inventories will go to multi-year lows because we've lost so much production. 

That resets the floor for the price of oil when this ends. He calls this "the day after". What does that look like? It'll take at least 3-4 months to bring back production in the Middle East, even if peace breaks out on the weekend and oil sells off. There will be a long-term $10-20 premium on oil that the world will have to put up with.

His view is that whatever you want your energy weighting to be, you want maximum weight right now. Things continue to get worse by the day, not better.

The worst energy crisis of our lifetimes. In the coming days and weeks, prices of WTI and Brent will need to better reflect reality.

You have to have a macro view -- incredibly challenging for DIY investors. Portfolio managers spend a lot of time and $$ to obtain global perspective. Then you need to decide if you want to be in drillers, refiners, oil, natural gas, etc.

The global LNG perspective has changed dramatically in just the past month. There was supposed to be this massive glut going out to 2029. Now with Qatar being hit, 20% of global LNG supply is offline right now. They say it'll take 4-5 years to rebuild, which translates into 17% of capacity. 

That means the world's lost 3.5% of global LNG for at least the next 4-5 years. Disaster. There's no strategic reserve for natural gas.

He has zero natural gas in his fund. Domestic natural gas fundamentals really eroded. There's too much supply. More oil drilling also produces gas alongside. You want to be all in oil right now.