“Seems” and “Things” — Sector Rotation Again?
Market Talk
On a Tuesday in August, it seems this Iran conflict isn't coming to an end anytime soon.
There are this-and-that reasons that we won't go into here. They don't really matter for this report. What matters is the feel of things after nearly six months of a conflict that was advertised as a likely short excursion.
It ain't ending soon.
And that puts domestic oil and natural gas production front and center.
So what's “the thing” about what “seems”?
Considering some past reports here, we've looked at the stock action of Micron (MU). It seems MU has become a pretty good bellwether for sentiment surrounding the AI sector. There are others, of course, but MU has been an interesting one to watch.
And Tuesday it was talking.
After rebounding strongly from the recent unwinding, MU turned sharply lower again Tuesday as AI and semiconductor stocks came under renewed pressure.
Bottom line, it seems like fading market conviction is showing up again in many of the same stocks that rebounded after the unwinding just a few weeks ago.
They went down.
They came back.
And now some of them are starting to roll over again.
Maybe what seems to be happening is just another minor market hiccup.
Maybe it isn't.
Is this what “seems like” another sector rotation?
Maybe.
On Tuesday, technology fell about 1.9%, the semiconductor index dropped 5%, and Micron fell about 7%. Meanwhile, energy gained about 1.8%, with healthcare up 1.6% and consumer staples up 1.1%.
Money moved somewhere.
That's the thing.
And so, what seems to be happening sometimes carries forward.
And sometimes things change again.
But let's look at something that IS and doesn't just “seem.”
The U.S. Strategic Petroleum Reserve is way, way down — now at its lowest level since late 1982.
Two stocks from prior Jones reports come to mind, both with major operations in the Permian Basin:
- Devon Energy (DVN)
- Permian Resources (PR)
It seems the market has started a process of rethinking a new normal that may be developing. Higher energy costs could be one of those “things.”
Who wins in that world?
And that seems to be what the market is trying to figure out.
But let's look at something that IS and doesn't just “seem.”
The U.S. Strategic Petroleum Reserve is way, way down — now at its lowest level since late 1982.
- Devon Energy (DVN)
- Permian Resources (PR)
And that seems to be what the market is trying to figure out.
The oil and gas sector can be a hard one to trade. It's not easy. And markets and sectors move on more than just one thing.
So we go back to the same tenet:
Maybe some. Not too much. Or none at all.
Stay Watchful.
Stay Watchful.
- Jones Report
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More later so ....Stay tuned, if you dare!
For now, we close by noting that any view on the market and stocks on any particular day may change in the days to come. That is why we watch and see how our views match up with reality. Looking ahead a few months may be a way to do things - but thinking too deeply about world events and the recent alliances forming, can make projecting ahead a dicey endeavor.
All in all - we use the word maybe "some", not "too much" and play it accordingly. Never get arrogant in our notions because things do change - and individual stocks are subject to many factors outside our control. So, we try to -stay aware.
With all the above caveats and attempted prognostications, I will close this post. Stay tuned for more opining on the market and stocks to watch.
ALL in my humble opinion, scroll down and read more. This site does NOT make Buy / Sell recommendations.
