There is only one “perfect resource” to combat any bad news that may come, says this strategist

Ahead of this, stock futures are falling after Ford warned of high supply costs in the wake of FedEx’s FDX
caution on profits last week.

The dollar and cash have been among the most popular havens for investors as they face recession risks with higher rates and higher inflation, along with a brutal war in Europe.

But ours call of the day by Warren Pies, co-founder and strategist of 3Fourteen Research, sees energy as the coverage for any incoming bad news. As he notes, after years of moving in opposite directions, stocks and bonds are collapsing together.

“I think you have a lot more potential results in the future now that stocks and bonds are positively correlated. There are very few resources that can cover the risks that are out there. And I think energy is the perfect resource, “Pies said in an interview published last Friday with Real Vision.

And while the Fed may attempt to raise energy prices until they drop – one of the main reasons for rising inflation – it may not be successful as “they can’t impact the main main driver of oil right now.” – geopolitics, said Pies.

“If we go ahead and fully sanction Russian oil and really get out of this stalemate that is happening right now and act, the world will run out of a lot of oil,” and that will create “a real recession,” he said. “Oil will do its thing … That’s why you need to have oil exposure through the energy in your portfolio.”

As for the types of oil companies, Pies recommends keeping it simple. “You don’t need to take any kind of company-specific risk or beta right here. Buy the Bellwethers, the big energy companies, the liquid energy companies.

“If you want to be a little different or out of the benchmark, we still like large-cap Canadian manufacturers because they have more or less lower cost of production and maintenance,” he said.

What he suggested to customers is a 10% to 20% energy position, as the industry accounts for 5% of the S&P 500 SPX,
and then thin the rest of the portfolio to quality companies. “You’re just trying to evade the unprofitable tech stuff,” Pies said.

The strategist sees a pattern similar to what happened after the last tech bubble between 2000 and 2005, when markets entered a new secular bull market in commodities and quality plus energy lagged behind. market, especially the technological space. He sees that a similar setup will take place over the next year.

Assessing whether the stock market is looking down, Pies said that if the S&P 500 hit the 3,600 neighborhood it would start buying. “We did it last time. On June 16, we released a report to our clients after being bearish all year, saying to put back about 25% or 33% of your capital back to market. And if we got there again, we would make the same move ”.

   And in the worst case, the S&P 500 drops to 3200?  "We may be another 10% lower, but if you can't handle a 10% drop in this industry, you're in the wrong industry," Pies said. </p> <p><strong>Laws:</strong> Stocks could be set to suffer further pain as the second half of September is historically "very bearish"</p><h6>Markets</h6>
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   <p>ES00 Stock Futures<span/>

    YM00<span/>

    NQ00<span/>
   are falling, with bond yields BX: TMUBMUSD02Y<span/>

    BX: TMUBMUSD10Y<span/>
   rise and price of oil CL<span/>
   constant.  The DXY dollar<span/>
   is higher and bitcoin BTCUSD<span/>
   is hovering just above $ 19,000.</p> <p><strong>Listen to Ray Dalio at the Best New Ideas in Money Festival on September 21-22 in New York.  The hedge fund pioneer has solid views on where the economy is heading.</strong></p><h6>The buzz</h6> <p>Ford F<span/>
   It is tapering off in the pre-market after warning that inflation pushed supply costs up by $ 1 billion, with the shortage of parts leaving more cars unfinished, although the automaker has stuck to its annual forecast.</p> <p>SPAC 'King' Chamath Palihapitiya is shutting down two IPOD vehicles<span/>

    IPOF<span/>
  after failing to find a target company in time.</p> <p>Peloton PTON, manufacturer of home fitness bikes<span/>
   features a rower.</p> <p>Apple AAPL<span/>
    the price of apps and in-app purchases is increasing in parts of Asia and in all countries that use the euro.  Stocks are slipping. </p> <p>The Swedish krona SEKUSD<span/>
   it is also falling after the Riksbank raised interest rates by 1%.  In addition to the two-day Fed meeting starting on Tuesday, the Bank of England, the Swiss National Bank and Norges Bank will also meet this week. 

   The data in advance includes building permits and the commencement of housing.</p><h6>The best of the web</h6> <p>New episode of "Serial" podcast expected after Adnan Syed's murder conviction overturned</p> <p>President Biden says the pandemic is over, but 400 to 500 people a day are still dying</p><h6>The graph</h6> <p>"What would have been a major catastrophe a few months ago has proved manageable so far," DWS strategists note, referring to high energy prices in Europe, particularly Germany, after Russia nearly stopped exports of gas.</p> <p>They say it's for two reasons: Germany is increasing gas storage faster than expected, and consumption has dropped significantly, as the graph below shows.  Although a harsh winter or even three might be expected, "we are now seeing how adaptable Western industries are in the face of extraordinary pressure," says European chief economist Martin Moryson.
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   <strong>Laws:</strong> Economy Germany.  the minister says natural gas storage will be "empty" after the winter</p><h6>The best tickers</h6> <p>These were the most active tickers on MarketWatch at 6am Eastern:</p><table> <tr class="data odd"> <td align="" valign="top" colspan="1">



  Ticker


  </td> <td align="" valign="top" colspan="1">



  Security name


  </td> </tr> <tr class="data even"> <td align="" valign="top" colspan="1">



    TSLA<span/>
  </td> <td align="" valign="top" colspan="1">



  Tesla


  </td> </tr> <tr class="data odd"> <td align="" valign="top" colspan="1">



    GME<span/>
  </td> <td align="" valign="top" colspan="1">



  GameStop


  </td> </tr> <tr class="data even"> <td align="" valign="top" colspan="1">



    AMC<span/>
  </td> <td align="" valign="top" colspan="1">



  AMC entertainment


  </td> </tr> <tr class="data odd"> <td align="" valign="top" colspan="1">



    AAPL<span/>
  </td> <td align="" valign="top" colspan="1">



  Apple


  </td> </tr> <tr class="data even"> <td align="" valign="top" colspan="1">



    NIO<span/>
  </td> <td align="" valign="top" colspan="1">



  NIO


  </td> </tr> <tr class="data odd"> <td align="" valign="top" colspan="1">



    BBY<span/>
  </td> <td align="" valign="top" colspan="1">



  Bath to bed and beyond


  </td> </tr> <tr class="data even"> <td align="" valign="top" colspan="1">



    APE<span/>
  </td> <td align="" valign="top" colspan="1">



   AMC Entertainment Preferred Stock 


  </td> </tr> <tr class="data odd"> <td align="" valign="top" colspan="1">



    NVDA<span/>
  </td> <td align="" valign="top" colspan="1">



  NVIDIA


  </td> </tr> <tr class="data even"> <td align="" valign="top" colspan="1">



    AMZN<span/>
  </td> <td align="" valign="top" colspan="1">



  Amazon.com


  </td> </tr> <tr class="data odd"> <td align="" valign="top" colspan="1">



    AVCT<span/>
  </td> <td align="" valign="top" colspan="1">



  American virtual cloud technologies


  </td> </tr>  </table><h6>Random reads</h6> <p>Beyond Meat's BYND<span/>
   COO accused of street rage outside a football game.</p> <p>The #OneChipChallenge would be putting the kids in the hospital</p> <p>A $ 100 wedding dress shared over several decades by eight brides.</p> <p><strong>Need to Know starts early and is updated until the opening bell, but sign up here to get it once in your inbox.  The e-mailed version will be sent around 7:30 am Eastern.</strong>


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