A Mess Worth Buying
Andy Snyder|May 4, 2023
Our mantra of buying the bad news continues today… with more bad news.
Oil prices are plunging.
We told our VIP subscribers last week that $60 oil was much more likely than $100 oil. The market appears to have been listening in. Benchmark crude dipped below $70 this week on fears of a worsening global slowdown.
As we said yesterday… the economic pain will be acute. But ultimately, it’s good news for stocks and the iron-stomached investors willing to buy them.
The era of ultra-low interest rates, blind stimulus and flat-out easy money will continue.
Here’s the diesel and gasoline price chart we showed VIP subscribers last week…
Prices on the wholesale level are falling quickly – especially when it comes to economically sensitive diesel.
Despite California’s oh-so-ignorant plan to outlaw the stuff, diesel makes the world go round. There’s nothing in the modern economy that doesn’t rely on diesel at some point in its product life cycle.
So when diesel demand slips (taking prices with it), that’s a clear sign of a slowdown.
We can see it in this disastrous chart…
The nation’s shipping crisis has clearly come to an end. Talk with a few independent drivers, and they’ll tell you that after two years of fiery demand, the phone isn’t ringing like it used to. Prices are falling.
We saw it when United Parcel Service (UPS) opened its books last week. Shares plunged by double digits as management warned of a demand slowdown… and the first downturn in revenues since 2009.
It’s bad news.
Surely we can’t be serious about all this “buy now” stuff. The sky is falling.
It’s true. We’re almost certainly in the throes of a recession even the White House won’t be able to deny (despite the disastrous effect it will have on the upcoming election). After the latest GDP reading showed a powerful late-quarter plunge, the economy is almost certainly slipping backward.
It won’t be fun.
But the stock market doesn’t care much about today or even tomorrow. It’s on the bow of this rickety ol’ ship with its fingers to its brow, squinting to see what’s over yonder horizon.
A fair look at the data tells us that it’s times like these that buyers are rewarded for their fortitude.
A recession has long been baked in. Even the blind can see the economic mistakes that lie around us.
They’re all priced in.
Now the market must figure out what’s next.
How deep will Powell’s cuts be? How much more money will Washington drop from the sky? What harebrained emergency will they cook up to juice the economy?
War? Famine? Environmental disaster?
This isn’t your daddy’s stock market. It’s a mess.
But, by golly, it’s a mess worth owning right now.
Andy Snyder is an American author, investor and serial entrepreneur. He cut his teeth at an esteemed financial firm with nearly $100 billion in assets under management. Andy and his ideas have been featured on Fox News, on countless radio stations, and in numerous print and online outlets. He’s been a keynote speaker and panelist at events all over the world, from four-star ballrooms to Capitol hearing rooms.