Lower oil prices favor foreign investments
The panel argued that WTI crude is headed lower due to an oversupplied global market, which serves as a tailwind for foreign equity investments.
The argument
Steve Grasso and Mike Coe noted that oil failed to spike despite US military strikes against Iran, indicating the market is pricing in oversupply. Courtney Garcia argued that sustained lower energy prices are highly beneficial for international markets, justifying an allocation outside the US.
The thesis, stress-tested
✓ What validates it
- ✓WTI crude remains sustained below $70 per barrel
- ✓International equity indexes outperform US indexes in a low-energy price environment
▸ Risks discussed
- ▸Geopolitical escalation in the Strait of Hormuz could disrupt supply
- ▸OPEC+ could implement deeper production cuts to defend prices
Hear it yourself
"With that, we're gonna bring in Gene Munster, managing partner of Deepwater Asset Management. Gene, great to have you back. Hi, Frank. Alright. So, Gene, you saying this is kind of much to do about nothing when we're looking at the weakness of the tech trade and the AI trade. You're going all the way back to the .com era. You say between 1995 and 2000, there were 10 pullbacks of about 10%. And just for context in the AI era, you said it's about four. Okay? So you're saying it's no sign of concern, but what about all those companies that turned out to not"
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