Oil Price Shock To Cause A Recession This Year? | Lance Roberts

**SPEAKER_1** (0:00)
K-pop demon hunters, Saja Boys' Breakfast Meal and Huntrix Meal have just dropped at McDonald's. They're calling this a battle for the fans. What do you say to that, Rumi?

**SPEAKER_2** (0:09)
It's not a battle. So glad the Saja Boys could take breakfast and give our meal the rest of the day.

**SPEAKER_3** (0:14)
It is an honor to share.

**SPEAKER_1** (0:16)
No, it's our honor.

**SPEAKER_4** (0:18)
It is our larger honor.

**SPEAKER_1** (0:19)
No, really, stop. You can really feel the respect in this battle. Pick a meal to pick a side.

**SPEAKER_5** (0:28)
I participate in McDonald's while supplies last.

**SPEAKER_3** (0:30)
Morning Decisions. How about a creamy mocha frappuccino drink or a sweet vanilla? Smooth caramel maybe or a white chocolate mocha. Whichever you choose, delicious coffee awaits. Find Starbucks frappuccino drinks wherever you buy your groceries.

**Lance Roberts** (0:45)
I'm not saying we're going to have a recession. I'm not calling for a recession. All I'm suggesting is and all I'm kind of warning about, so to speak, is that the risk has now become more elevated because of the spike in oil prices, but that's dependent on how long oil prices remain elevated.

**Adam Taggart** (1:09)
Welcome to Thoughtful Money, I'm Thoughtful Money founder and your host. Welcome you here at the end of the week for another weekly market recap featuring my good friend, the Irsine portfolio manager, Lance Roberts. Lance, how are you doing?

**Lance Roberts** (1:23)
I'm doing great. Oh, I'm just trying to get something put together here. Go ahead. I'm doing great. How are you today?

**Adam Taggart** (1:28)
Happy Easter. Yeah, happy Easter.

**Lance Roberts** (1:30)
Technically, it's Good Friday, so happy Good Friday. Markets are closed today as we're recording, but happy Easter to you and your family. Many blessings.

**Adam Taggart** (1:37)
All right, same to you as well. And if you're of the Jewish faith, happy Passover, everybody. And if you're watching this live, yeah, you'll watch it the day before Easter, so hope everybody has a great time tomorrow. All right, Lance, I went with Irsine because right before we turned the camera on here, you were telling me you were feeling more bearish than normal. So Irsine, Latin for bear. So let's get into the reasons for bearishness, but let me set it up with this.
How much of your bearishness is due, if any, to what some may think is sort of a Trump rug pull, where it looked like the markets were potentially getting ready to start rallying again. And then we had the presidential address, which the market certainly didn't like, I think largely because he didn't say, hey, we're getting out of there right away. He said, I want to get out of there soon, but no agreements yet, and I'm going to blow these guys back to the Stone Age if they don't come to an agreement soon. So all of a sudden, everybody thought, oh, God, this thing is going to last longer than we hoped. So how much is due to that rug pull?

**Lance Roberts** (2:45)
Well, so the market ended up positive on Thursday. So the speech was Wednesday night, the markets opened down Wednesday morning, a rallied immediately back into positive territory and hung there all day. So actually, for the market rally this week, we had three very, very, very good days kind of back to back and are sitting right at the sooner or later moving average. But no, my bearishness has nothing to do with the president or anything else, right? Because you and I have talked about this before. Markets, when everything is going great and markets are going up and everything is fantastic and we're very overbought and extended, I'll come on the show with you and I'll say, hey, this is great, but you probably need to think about reducing risk, taking some profits, rebalancing your portfolio here because markets are very extended. And all it takes is some type of exogenous, unexpected event to basically cause a reversal in buyers and sellers. And so that event has been, we started out this year and we were talking about the reflation trade and we saw the S&P 500 Equal Aid Index was outperforming the market cap related index. And we have very strong returns in January and February and markets are doing fantastic. And I'm like, hey, be a little cautious here. Because this whole reflation trade is based on a really shaky foundation. And if something happens, you're going to get a big reversal in those trades. And that's exactly what's happened. So my point about this is this, is that when it comes to markets, set aside the event, understand that the event is just the catalyst for causing people to rethink their positioning in the markets. And that's what market, all markets are doing right now is repricing valuations. And we've said this numerous times on the show, we've written articles about this as well that we've discussed here on the show as well, that at some point, that E on valuations is going to get adjusted for some type of event. And earnings expectations are very exuberant in the markets.