Oil at $55? Why one strategist is betting against the only winning asset class of 2022.

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The miserable first half in the financial markets comes to an end on Thursday.

The S&P 500 SPX,
has dropped by 20%. Government bonds have been no cushion, with the US government S&P bond index losing 8%. Or GC00,
that supposed inflation coverage has lost 1%. And don’t even ask about crypto.

The only major asset that has really gained ground this year is energy, with a 45% increase in oil. So the call of the day goes to Dhaval Joshi, chief strategist at BCA Research’s Counterpoint, who says CL.1 oil prices,
it will be halved, to $ 55.

What he calls the “sale of everything” in 2022 has its parallels with 1981. At the time, oil producers Iraq and Iran were at war, as commodity producers Russia and Ukraine are fighting today, and the Federal Reserve responded with aggressive interest rates. excursions.

Joshi points out that there has never been a recession in which oil prices did not plummet, even in the stagnant 1970s, as they fell 25% in 1974. The falls are especially sharp, as the Oil prices also tend to rise before the slowdown, and already leaned. fragile economies in recession.


Lower oil prices















Source: BCA Research

Going back to 2022, Joshi says that applying the average reduction of the last six recessions, from 60%, to a maximum of $ 130, means that oil will fall to $ 55.

Suggests shortening of oil, or oil against copper HG00,
Equity investors should underweight the oil sector compared to basic resources, industrial or banking, and underweight heavy oil stock markets such as Norway.

“Suffice it to say that all of these are related trades. They will all work, or not all will work,” he adds.

The OPEC + videoconference meeting begins at 7:30 a.m. East.

The buzz

The economic calendar includes unemployment demands, which have held up well despite recent recession fears, as well as the May reading of the Fed’s preferred inflation measure, the personal consumption spending price index. Chicago PMI data expires shortly after opening.

Sweden’s Riksbank raised interest rates by half a point, the last central bank to act against inflation.

Shares fell in the after-hours trade as the home furniture retailer, formerly known as Restoration Hardware, lowered its outlook, citing a deteriorating economy. Walgreens Boots Alliance WBA,
which has just ended sales talks at its Boots UK pharmacy, exceeded earnings expectations, as did Constellation Brands STZ,

ADP said it will stop issuing its private sector payroll report until it reviews the survey, which it plans to complete by the end of the summer.

Grayscale is suing the Securities and Exchange Commission following its latest bid to get approval for a cash bitcoin fund. The cryptocurrency was again trading below $ 20,000.

A woman pushing a pram was shot dead on the Upper East Side.

The markets

US ES00 stock futures,

pointed much lower on Thursday, with the Dow YM00 contract,
lose more than 300 points. 10-year Treasury yield TMUBMUSD10Y,
it dropped to 3.06%.

The best tickers

Here were the busiest stock market tickers at 6:00 p.m.


Security name



+ 2.02%

AMC Entertainment






Mullen Automotive

+ 1.30%


+ 1.42%



Vinco Ventures


Bed bath and beyond


Evofem Biosciences

Random readings

A Vancouver radio station has been playing “Killing in the Name” in a loop after the dismissal of two disc jockeys.

Los Angeles and Mumbai prove to be good hosts for big cats like mountain lions.

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