Protecting Your Portfolio Against Rising Oil Prices and Yields 9/10/26

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Scott Wapner (1:00)

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Carl, thank you. Welcome to the Halftime Report. I'm Scott Wapner, front and center this hour. You know the big story today. Oil yields up, stocks down. We trade it with the Investment Committee, as always, joining me for the hour. Stephanie Link, Malcolm Ethridge, Bill Baru, Josh Brown. I'll show you the markets, just to get you caught up on where we are. We're red across the board. Not big losses by any stretch, but nonetheless, we are red. The 10-year topping 490, crude topping 100 The XLE is at a new high. You just heard the mortgage rate report from Diana Olick. The home builders are decidedly weaker today in what's been a really bad week as yields continue to back up.

I'll give you the first shot at this. I mean, it's pretty easy to figure out what's going on in the market. As oil goes up, yields go up, and stocks remain challenged.

Stephanie Link (2:07)

Yeah, I mean, there's a lot of moving parts, to your point, and we're all watching oil prices. We're all watching bond yields. We're all watching inflation and the PPI number, CPI numbers tomorrow, how it impacts the core PCE numbers.

Scott Wapner (2:20)

Yeah, they were all hotter. All the components in the PPI.

Stephanie Link (2:24)

Go into the PCE.

Scott Wapner (2:25)

For the PCE, we're hotter.

Stephanie Link (2:27)

I know.

Josh Brown (2:28)

That's the big problem.

Scott Wapner (2:29)

And that's why yields are up as well, because of what oil's doing. And normally, you get CPI before PPI, but now that you get PPI first today, and you get the core PCE components that are hotter, therein lies the issue.

Stephanie Link (2:43)

But it's not really a surprise, though, right? I mean, inflation has been stubbornly high for such a long period of time. So, and it also, by the way, Scott, happens to be September, which is the worst month or the year in the S&P 500 On average, the month is down 2.7 percent. Before you get too negative, though, October and November are the next two best months of the year, and I expect that to be the case this year because of the economic momentum, the earnings momentum, and yesterday, we had two CEOs, two bank CEOs, that said very important things about the macro environment. Wells Fargo and Bank of America, both CEOs spoke on CNBC, and they talked about the strong consumer, both the high-end and seeing a little bit of a pickup in the low end, credit quality is excellent, M&A activity is abundant, investment banking, especially for Wells, because they've been behind the eight ball for a while on investment banking. But the most important thing to me is profitability. Both are indicating that profitability is going to continue to improve. So I care more about what the front line bank companies are saying, because they see real-time what's happening to the consumer, despite all the stuff that we're actually worried about. And one last thing, credit default swaps, spreads, they're actually pretty darn tight. They're not really blowing out at all. And so that's the thing I keep an eye on as well. So okay, it's going to be volatile in September. I think you want to pick your spots, pick your favorite stocks, because I do think you're going to see a rally and a recovery into the end of the year.

Scott Wapner (4:12)

Okay, we're hugging 7600 on the S&P as you see.

Malcolm, I feel like that's where the sort of tug of war is. It's noticing the calendar. You don't have a lot of things with you this month, so people are getting cautious. Though Steph paints the bigger picture story, which is still decidedly bullish, there's just no two ways around it, which you want to lean into more right now. I go back to what we mentioned yesterday from Citadel Security, Scott Wapner, Highest Conviction, he says. Highs are in for the month. Mid-month really starts the weakness seasonally. Blackout window on the 12th. Option expiry the 18th. Quarter and the 30th. They're all historically large risk transfer events. Then I go to a Goldman Sachs desk today, which wonders whether investor sentiment and positioning might be too cautious at the moment. It pretty much lays out exactly how we started the show. There are reasons to be cautious as you enter the month.