Oil prices: $150 a barrel ‘is probably in the cards,’ strategist says
Fitz-Gerald Group CIO Keith Fitz-Gerald joins Yahoo Finance Live to talk about the pressures of rising gas prices, the February jobs report, safely maneuvering the market in the current period of uncertainty, Microsoft, Pfizer, and the Fed.
Video Transcript
JARED BLIKRE: And we want to stick with the markets and bring in Keith Fitz-Gerald of Fitz-Gerald Group. He is a chief investment officer there. Keith, always great to see you. Just want to get your reaction to this breaking news that we're seeing about oil and its potential effects on the economy, all kinds of spillover effects for the consumer. And we can get to the jobs data a little bit later, but just want to get your reaction to the potential development here.
KEITH FITZ-GERALD: Well, unfortunately, I am not in the least surprised. I started calling for $100 oil last summer on your show, as a matter of fact. Then we started talking about 1.5--
JARED BLIKRE: You did.
KEITH FITZ-GERALD: --somewhere in the neighborhood of last November. So, you know, the Ukraine intensifies the situation. Global supply CEOs are taking matters into their own hands. And this doesn't surprise me at all. I think $150 is probably in the cards now at this point.
JARED BLIKRE: And let me just ask you then about this morning's jobs numbers because we got that big headline beat. I think it was 678,000. We got unemployment ticking down to 3.8%. That is a pandemic low as well. Wage growth, 0%, kind of an outlier there, but what are you making of this?
KEITH FITZ-GERALD: Well, you know, those statistics are always debatable. I mean, you know, many of the statistics we rely on or have relied on in the past are now more cooked in the Christmas goose because of the way the geopolitics is impacting everything. People have forgotten that we actually have a relatively strong economy underneath that. We just heard from the CEO of Siemens talking about all of these great things that their company is going to be doing.
And that's just one of thousands of companies, big and small, that are going to work, returning to work, getting out to work. This is the kind of stuff that, ultimately, when we get through Ukraine, we get through the Fed, is going to power our economy higher farther and faster than a lot of people who are betting on the end of the universe as we know about it are expecting.
JARED BLIKRE: And I'm wondering what you're looking at in terms of the market direction here, because there's a classic debate between active versus passive. With hindsight, 2021 is a much easier year than we're experiencing right now. This is arguably a stock picker's environment. I'm just wondering what you're looking at here.
KEITH FITZ-GERALD: Well, to me, this is like, you know, if you're a golf player, for example. You know, to me, this is not the time to be swinging all the way to the green. This is the time where you concentrate on keeping the ball on the fairway. If you're a boater, you keep it between the buoys. If you're driving, you keep it between the center lines. This isn't the time to take rash, big risks. This is the time to concentrate on knowing what you're going to do to survive, concentrated on those companies that are going to produce profits. They're going to move forward practically no matter what happens. So it's a very different, but very important nuance in how you should be approaching the markets right now, in my humble opinion.
JARED BLIKRE: And just looking at some company specific names, I'm wondering what you like in this environment. Because we've been talking to a number of analysts this year, and one thing that keeps coming up is quality, quality balance sheets, having enough cash on hand, and being able to withstand, generally, a rising interest rate environment, which is what we're in. So just wondering what names fit in for you in your outlook here.
KEITH FITZ-GERALD: Well, we operate on something called the five Ds. Now this is just big trillion dollar trends that are going to occur, no matter who's in the White House, practically no matter what happens geopolitically, no matter what the growth scenario looks like. So to me, right now, in line with keeping it on the fairway, I'm looking at companies like Apple and Microsoft that are getting taken to the cleaners.
Crowdstrike, for example, is another one. It is getting absolutely hammered today because people are talking about rates and inflation and all this. They're completely forgetting about the fact that Russia has got one of the leading cyber crime, cyber sophisticated warfare operations on the planet. So does China and North Korea. That's a company that's not going anywhere.
So I'm looking for those kinds of names where I've got big survivability. I'm also looking at the Pfizers of the world. Again, people are forgetting that all of this stuff makes the world go around. What they lack is the patience to see through the short-term noise.
JARED BLIKRE: And just thinking about the commodities market and kind of how it's intertwined with a number of emerging markets, we think EM and most of the ETFs are just stuffed with Chinese names. But we had a guest on the other day who said if you want to if you want to participate in the commodities rally, you can do that through, for instance, South African stocks or investments in the company. Brazil is another one that's been attracting attention. Anything interesting you in the emerging markets here?
KEITH FITZ-GERALD: Other than those two names, probably not. You know, again, it's, to me, it's what makes the world go round. That's the stuff that is at the forefront of my thought right now because most of this, history shows very clearly that short-term noise passes. It may be ugly, it may be scary, it may be uncomfortable. But that does not change the fact that history shows this kind of stuff eventually fades to the rearview mirror. And more often than not, for those who have the guts, it's a great buying opportunity.
JARED BLIKRE: All right, and real quick, I just want to ask you here, what are your expectations for the Fed in mid-month here?
KEITH FITZ-GERALD: Oh, I'm not smart enough to figure that one out. You know, I wish that they would take a cue from everything happening around the world. But I think sadly, they're going to raise rates because they want to prove a point. They got transitory wrong for so long that they can't back themselves out of a corner.
JARED BLIKRE: All right, we want to thank you for being here. Keith Fitz-Gerald of Fitz-Gerald Group, where he is the chief investment officer, always great to see you.
