This week’s Alpha Trader podcast features hosts Aaron Task and Stephen Alpher speaking with Bob Iaccino, co-portfolio manager of The Stock Think Tank, and host of The Market Think Tank.
Talking as oil (CL1:COM) jumps 3% to a new cycle high, a bullish Bob Iaccino says demand for crude is rising a lot faster than OPEC is willing to supply it. With the American shale boom not coming back anytime soon, the cartel knows it’s the marginal supplier, and is only going to drip out as much oil as is necessary.
Speaking of those American supplies, Iaccino takes note of restrictive drilling/exploration policies of the Biden administration, as well as the growing power of the ESG movement, which last week took down a couple of board seats at Exxon Mobil (XOM).
Of possible crude-related investments, Iaccino reminds that when he’s bullish on oil, he buys oil. The correlation between the energy sector and crude isn’t always one-to-one, and it would be highly frustrating to be right on oil and watch energy equites not do a whole lot.
Zooming out to the larger inflation picture, Iaccino suspects the Fed will be proven wrong over its insistence that currently perky price levels are transitory. While commodities may go up and down in price, the cost of labor is far stickier. The wage hikes we’ve been seeing - Bank of America lifting its minimum wage to $25 per hour is but one example - aren’t going to be given back. Ultimately, they’re going to feed through into the price level.
There’s plenty more, including Iaccino’s view on whether the dollar is going to continue its downtrend, and what stocks he’s buying (non-energy-related, of course).
Learn more about your ad choices. Visit megaphone.fm/adchoices