Diehl: Strait of Hormuz "Cautionary Tale," "Out" of Mag 7 Except NVDA & AMZN

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Fast Money 3.0
Management Consulting
Philip Diehl 7.0

Diehl: Strait of Hormuz "Cautionary Tale," "Out" of Mag 7 Except NVDA & AMZN

oil

wti

Oil prices are going to be stickier than what people are anticipating... people are going to be somewhat disappointed by how much oil prices, gasoline prices fall over the next several weeks or longer. Fragile two-week ceasefire and countries rebuilding strategic reserves above pre-war levels create sustained demand.

Asks for assessment of markets given volatile conditions and fragile ceasefire.

Host
Philip Diehl

Ceasefire is fragile with three parties involved (US, Iran, Israel) having different objectives; skeptical it can hold for two weeks.

Parties are far apart and have dug in their heels; Israel has different strategic goals than the US.
Confirms fragility with reports of ceasefire violations and asks outlook for oil and gold.

Host
Philip Diehl

Oil prices will be stickier than anticipated due to short ceasefire and countries rebuilding strategic reserves above pre-war levels.

Countries that ignored OECD reserve recommendations are now stockpiling, creating demand above baseline.
Asks if more worried about inflation (hike) or labor (cut) given Fed minutes mentioning prolonged war impact on jobs.

Host
Philip Diehl

Fed is probably more concerned about jobs due to recent weakness and disruptive short-term impact of AI on employment.

Stagflation is hard to escape; AI may create jobs long-term but will be disruptive short-term, especially for young people.
Asks how to position in this environment.

Host
Philip Diehl

Recommends defense stocks, oil stocks (Occidental Petroleum), discount retail (Walmart); out of Magnificent Seven except Nvidia and Amazon (for retail/cloud, not AI).

Not interested in crypto due to unnecessary risk; Amazon is held for retail and cloud services, not AI role.
Notes some are taking money off table due to downside risk from ongoing war and fragile ceasefire; asks what could happen in next few days.

Host
Philip Diehl

President painted into a corner; political opposition and lack of rally-round-flag effect make him cautious, but hard to predict due to face at stake.

Expected quick war and political boost like Putin in Ukraine, but neither happened; political standing deteriorated.

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