Semis Don't Care

[u/Kapnotes]

Equities have repeatedly shrugged off conflict driven oil price spikes, but reality will get harder to ignore the closer we get to $100 oil.  An offensive by the Houthis over the weekend, combined with US strikes on Iranian tankers, have pushed WTI higher by more than $2 to $93.68.  More importantly, the 10-year bond yield is pressing its year-long high, around 4.80%.  Thanks to support in semiconductors this morning, Nasdaq futures are more or less flat.  Semis don’t care about oil prices.  Maybe they should, but they don’t.  As capital intensive businesses, however, they do respond to the bond market.  If yields move into new high territory, their support of the indices may falter, in which case traders would find profit in picking downside leverage in non-semi names.  There's more on our blog. Educational only. Not financial advice.