Over the past few weeks, we’ve seen a nice bounce in so-called “inflationary” sectors. Basic materials (XLB) emerged as last week’s leader, and over the past month, the top-performer is energy (XLE).
But if you’ve been tuning into TheoTrade’s live sessions, you’ve heard me talking about crude oil’s imminent collapse.
And finally, I think we have another catalyst for this move to begin. Check this out…
Drill Baby, Drill
The incoming Trump administration’s cabinet is now complete, and when it comes to the inflationary conundrum, there are two individuals that I’m watching closely.
The first is Chris Wright, who was tapped to head the Department of Energy, and the second is Scott Bessent, who is set to lead the Department of Treasury.
To sum up the policies of these two individuals – the plan is to grow our way out of any economic crisis or conundrum.
The oil wells are going to be gushing, as Wright is big on fracking as well. When it comes to Bessent, he supports a weak dollar along with low energy prices to help stimulate growth.
I’m not sure he’ll succeed in the weak-dollar component of his (likely) plan, as if the economy grows anywhere near what they’re planning to achieve, global capital inflows are going to be endless.
Regardless, I think this helps create the backdrop for a market mania in 2025. In markets, when the getting is good, it’s so important the opportunity is seized. They’re not always this way.
As always, I’ll keep you in the loop.
Talk soon,
Gianni
