Macroeconomic conditions and sector capital flows



Driven by intensifying tensions in the Middle East, Brent crude oil and WTI crude oil have continued to rise. WTI broke through $81 per barrel, and Brent is nearing $87 per barrel. Geopolitical risk premia have led the energy sector to be the only sector that gained today among the S&P 11 major sectors.

The latest U.S. PPI and retail sales data confirm that inflation is continuing to cool. The 10-year Treasury yield has fallen back to around 4.52% ~ 4.55%, but this has not been able to completely prevent a structural liquidation in growth stocks due to excessive valuations.

$GT
GT-0.29%
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TightStop
· 07-19 17:13
Geopolitical conflicts have pushed up oil prices, but the slowdown in inflation hasn’t actually saved growth stocks—looks like the market is still afraid of overvaluations. We’ll have to wait for a pullback before jumping back in.
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LiquidationDenier
· 07-19 17:04
Oil prices have risen; energy stocks are indeed surging, but growth stocks still need to be handled with care.
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SmoothCurve
· 07-19 15:01
As the situation in the Middle East tightens, crude oil immediately surges, and the energy sector stands out above all others—this script is something we’ve seen many times. But since the PPI and retail data are good and US Treasury yields fall, growth stocks should theoretically benefit; instead, there’s a structural liquidation, which suggests valuation bubbles still need to be squeezed out. For the $GT ticker, you should see whether it’s related to the energy cycle—don’t chase it blindly higher.
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