Recession risk is still low (20-30% chance) but rising and needs to be on the radar. A slowing economy is the concern, driven by downward GDP revisions, Middle East tensions, and higher energy prices. This will increase market volatility. Recessions are almost always accompanied by high oil prices.

High oil prices won't impact the immediate Fed meeting but are a tax on consumers and will eventually flow through to consumer prices, potentially causing inflation to tick up in a quarter or two. The Fed can't ignore persistently high energy prices.

The Fed is on a tight wire. The easiest path is to do nothing and not overreact. Expect no Fed action for a couple of quarters until there is clear direction from either the job market or inflation.

If private credit issues resurface, investors locked out of liquidity will sell liquid assets like high-quality large-cap stocks. This will cause increased equity market volatility and present buying opportunities during big down days driven by liquidity needs, not fundamental fears.

Qualcomm is transitioning from smartphone chips to aerospace, defense, and AI chips. This revenue shift is not fully reflected in its beaten-down price, making it a buying opportunity.

Talen Energy sells power directly to wholesale buyers like Amazon for data centers. It has a mix of natural gas and nuclear assets and is expanding exponentially. It's a great AI story, not a utility story.

Carpenter Technology is a high-end materials company, the 'picks and shovels' of the aerospace sector. It will benefit from expected increased defense spending.