The oil market could explode at any moment: Phil Flynn

Backed all of the action. Joining me now from the New York Stock Exchange, Meridian Equity Partners senior Managing Partner and John Corpina and the Price Futures Group senior market analyst and all things oil, Phil Flynn. Phil oil did sort of this pop and drop again. We’re talking about risk on, risk off back to risk on within hours of each other. Does this continue over the next week or two? You sure bet. You bet it does. You know, today it was all about de escalation. But that move that you saw not only in the oil market list, but the risk aversion that we’re seeing in things like gold and silver, it’s really unlike anything we’ve seen in many, many years. And make no mistake about it, this oil market could explode at any minute. And I think we just saw a preview of what might happen if this indeed escalates. Now, right now, when you look at the future spreads, they’re basically saying, hey, this thing could be all over, it could calm down. But you know, you can’t bet on that, especially going into the weekend, you know, separate from what’s going on in the Middle East. John, can you give me a sense of whether you are surprised that we haven’t seen a more pronounced pull back? Yes, week to date, we’re looking at a 5% drop for the NASDAQ and 3% drop for the S&P. But we really haven’t seen anything close to a 7% drop here and there with these markets, right Liz? It’s been pretty, pretty orderly of what we’ve seen. Yes, it’s been over a, you know, two to three-week period here. But we haven’t seen that that overall fear, that overall capitulation talking to customers. We haven’t gotten these large influx of sell orders, but take away this insulated incident that we’re talking about that’s going on in the Middle East. The headwinds that we’ve had in this on this market have continued to be here. We’ve talked about these since since January, other geopolitical risks that have been out there, interest rates, inflation, how, how and when was that really going to turn our markets and get some pressure on it. So you couple that with what’s gone on in the Middle East and over this short period of time, which is still an open-ended item. And I believe it was Jennifer who said before the next 48 hours are going to be really, really critical. I think all that coupled together has shifted the overall tone to our markets to see this activity that we’re seeing now with the activity that we’ve seen since November, this upswing in our market, I want to say it is healthy for this market to kind of flush out a little bit. I’d prefer to see a little bit of a faster flush out than this small bleed that we’re seeing. But eventually it will flush itself out. And as you said, a lot of earnings next week, economic data, what is the Fed going to do? How are they going to use this data? And as we continue to take June off the table, it appears that we’re getting, you know, when is that next cut going to come? We keep battling this calendar in front of us with the election cycle coming up. And I know the Fed says that they’re not politically, they’re going to be independent and not use that as a as a a pause and anything they want to do. I do feel that as we get closer and closer to that date, it’s really going to affect the Fed from really making a significant move. Well, as, as Phil said in his note earlier, you can’t hurry cuts. No, you just have to wait. Yeah. But I mean, what’s next if we look at Fed funds futures, there is now less than 50% chance by a long shot of a June cut, less than 50% for a July cut. And now you got to wait till September as far as the market is concerned to see a + 50% odds that we will see a rate cut. So what is the trade here, Phil, if you’re looking to to catch something on the upswing and it certainly isn’t the chip makers, which I know we already mentioned them, but NVIDIA, Advanced Micro Devices, Micron, Marvel, we’ve got Avago, which of course is Broadcom that ON Semiconductor microchip, this is a mess here. ASML, they’re all down. It’s a total mess here, right? You know, but mainly because they’ve been all up. And, you know, make no mistake about it, the chip traders and the interest rate traders are going to their safe space list because they don’t want to look, but they’re going to have to look. And we have to go back to, you know, listen, we’ve got to go back to what’s hot. Listen, there’s no doubt those sectors were on fire. They’re going to be good in the long term. If you’re not in, you’re going to get a great buying opportunity. We hope it corrects more, but don’t underestimate what’s happening in commodity. It’s unlike anything we’ve seen probably since the 1970s. Look at aluminum, look at copper, you know, look at these metals companies. This is going to be a hot sector for a long period to come. And now when we’re talking about new sanctions on, on Russian metals, where the, the, the CME Group can’t trade with Russia, they’re going to crack down on that. The London Metals Exchange can’t do that. So we’re seeing a supply squeeze in commodities unlike anything we’ve seen in a long time. And you add to that the risk aversion into commodities, you know, you know, I, I feel like I’m a kid again. This is this is how the business was when I got started 100 years ago. I think it was 100 years ago. Yeah. You know, I’m looking at COP per up 1 1/3% silver, up 1 2/3% gold gaining 12 bucks. So at 2410, let me finish with John Corpina. You got a favorite trade. And I know it’s hard because people appear to not want to go into the weekend long, certainly when it comes to S&P 500. Yeah, it’s a tough one with a lot of the risk that’s out there. And again, the next 48 hours being so, so critical to that situation, the overall market, I think we’re going to try to find some of these sectors that have been hit pretty hard. Yes, they might have some downside to him a little bit, but I think you’re seeing in some of the technology areas there a significant discount to where we were three weeks ago. All right, I know you all have a good weekend, but constantly looking over your shoulder at your stock charts and your market charts and futures. John Corpina, Phil Flynn, thank you.