An Investor’s Safe Haven Amidst Volatility Dear Reader, Interestingly, the biggest story last week was not the Federal Reserve’s key interest rate decision...
Rather, it was the big surge in Treasury yields.
Last week, the 10-year Treasury yield broke above the 4.5% level, and it remains above this level today.
To put this into perspective, the 10-year Treasury yield stood at 4.3% at the start of last week, and it was at 4.1% at the end of August. The 10-year Treasury yield is now at its highest level in 16 years, and its surge to over 4.5% continues to rattle the stock market.
The one positive is that rising Treasury yields are helping the yield curve start to “dis-invert.” The spike in Treasury yields isn’t the only worry on Wall Street’s mind, however. The reality is that folks are concerned that there will be a government shutdown, too.
In today’s Market 360, we’ll talk more about the government shutdown fears… and where I see a safe haven for investors. Shutdown Fears Spook Markets As I mentioned, the fact is that fear of a government shutdown is on everyone’s mind. If Congress does not reach a deal by this Saturday, the U.S. government will shut down at 12:01 a.m. Eastern time on Sunday.
Last Thursday, a very vocal minority in the House of Representatives (the disruptors) blocked a procedural vote on defense spending – and that has raised the risk of a government shutdown.
Then, this week the Senate released a plan that would fund the government through mid-November, but many believe it would be unlikely to pass the House.
I still don’t think there will be a federal government shutdown, as that would be political suicide, but we’ll see how the deficit ceiling debate plays out throughout the next few days.
There’s no denying this, though: Market volatility will likely continue until Congress sorts out the debt ceiling issue. The Energy Safe Haven So, if you want to profit amidst the volatility, you want to invest in the safe havens. In this case, the safe havens are fundamentally superior energy stocks.
Here’s why…
Oil prices have resurged with a vengeance with prices rising a whopping 30% since June. This is due to three main factors.
One being depleted inventories.
Both the American Petroleum Institute (API) and the Energy Information Administration (EIA) have recently reported that crude oil inventories in the U.S. have declined dramatically.
Last week, the API revealed that U.S. crude oil inventories declined by a whopping 5.25 million barrels. This week’s data showed a slight build of 1.586 million barrels. API noted that crude oil inventories have declined by more than 51 million barrels since April. Gasoline inventories dropped by 70,000 barrels this week, while distillate inventories declined by 1.698 million barrels. Both gasoline and distillate inventories are now sitting below their five-year averages. This week, the EIA reported weekly inventories dropped by 2.2 million barrels and are now at a 14-month low. Gasoline inventories rose by one million barrels and distillate inventories increased by 400,000 barrels, but the inventory of refined products remains 13% below its five-year average.
Crude oil stockpiles at the U.S. storage hub in Cushing, Oklahoma, also dipped to their lowest level in 14 months. Strong refining demand and increased exports have depleted the stockpiles. Currently, crude oil stockpiles at Cushing total slightly below 23 million barrels, or the lowest level since July 2022. That compares to more than 43 million barrels back in June, which was a two-year high. In other words, crude oil inventories at Cushing have dropped 46.5% in only four months.
So, there are now concerns that further drawdowns could push Cushing below minimum operating levels, which would put even more pressure on crude oil prices.
I’ll further discuss the energy patch – and the two other factors driving oil prices higher – in Friday’s Growth Investor Monthly Issue for October. So, sign up here to become a member of Growth Investor if you’d like to receive the full details on Friday.
I will also be adding two new fundamentally superior stocks to my Buy Lists, as well as release my latest Top Stocks lists.
Click here and join me at Growth Investor today.
(Already Growth Investor subscriber? Go here to long into the members-only website.) Sincerely, |
| Louis Navellier
Editor, Market 360
P.S. There is a great divide opening up in America – and investing in my Growth Investor stocks will help get you on the right side of it. On one side is a new aristocracy that’s amassing more wealth more quickly than any other group in American history. For people like me, the one percent , life has never been better, more prosperous.
On the other side, the opposite is happening. Wealth is flowing out of the pockets of ordinary Americans at an unprecedented rate.
What’s happening is only going to gather in strength over the coming decades. It certainly won’t weaken.
Few Americans even know that any of this is going on. I’ve never seen anyone from my side of the chasm step forward to explain any of these things.
It’s why I put together this video . In it, I’ll lay out exactly what is happening, including several key steps every American should take right now. |
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