Normally, I don’t provide updates on daily market action, but there’s something important happening today. Saudi Arabia and Russia have extended production cuts for several additional months. The US has tried to buy a tiny amount of oil to begin to replenish the strategic petroleum reserve (SPR), but that keeps pushing oil prices higher. Oil is now above where it was a year ago. The main reason the US has had disinflation (a reduction in the rate of inflation) has been huge y/y decreases in energy prices. With that reversing, market participants are beginning to realize we’re going to see an increase in the CPI in the next couple of months. That’s what’s taking the market down both yesterday and today (so far).
The good news is DKI subscribers should be well prepared for this with a huge energy portfolio and other positions heavily hedged. If you’re a new subscriber, and just starting to make adjustments to your portfolio, don’t worry. You’re not too late. This is going to be a long-term trend so you can still profit from it.
IR@DeepKnowledgeInvesting.com if you have any questions.
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