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| What are this week’s market risks or opportunities? |
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| A year ago, the only debate was how fast the Fed would cut. |
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| Then the rate-cutting cycle ended earlier than anyone expected, and now the market has flipped to the opposite question. |
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| On Wednesday the Fed decides, and after this week's in-line inflation report the odds of a rate hike jumped to a decisive 85%. |
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| This is the biggest market shift of 2026: not the size of one move, but the direction of the entire cycle turning upward again. |
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| The bond market is already there, with the 30-year Treasury yield breaking past 5.3%, its highest since 2007, and shorter-term yields climbing even faster. |
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| When the cost of money heads up instead of down, everything priced for cuts has to be repriced, and last cycle's winners are the most exposed. |
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| The only question left is whether your portfolio is ready for it. |
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| Which trades should I consider? |
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| Amid the ongoing conflict in Iran, energy sits at the center of this. |
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| The same oil spike feeding inflation is helping push the short end of the curve higher, and it is exactly the kind of real-economy exposure that tends to win when rates stay up. |
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| The sector has also been one of the standout performers of 2026: our ProPicks AI Energy Elite strategy is up +76.93% year to date, beating its benchmark by +34.47 points. |
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| Several holdings have run even harder as crude climbed:
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| The oil rally is rewarding different parts of the energy chain. |
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| Delek US Energy, HF Sinclair and CVR Energy are refiners, so their earnings are tied to the spread between crude costs and the price of finished fuels. SM Energy is an upstream producer, giving it more direct exposure to higher crude and natural-gas prices. |
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| The common theme is stronger energy pricing, but the earnings drivers are different. Refiners benefit from tighter fuel markets; producers benefit more directly from the commodity itself. |
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| Should I consider this trade? |
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| SM Energy (NYSE:SM) is the producer in this group, with oil and gas operations across the Permian Basin and South Texas. |
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| ProPicks AI added it in July after a strong first quarter: revenue rose about 73% to $1.48 billion, while EPS of $1.55 beat the $1.05 consensus. Merger synergies had climbed to $375 million annually, with 80% already secured, while leverage was on track to fall below 1x by year-end. |
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| Q2 accelerated the story. Revenue reached $2.50 billion, EPS rose to $2.19, and production hit a record 40 million barrels of oil equivalent. Management raised second-half production guidance to as much as 440 MBoe/D without lifting planned capex. |
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| The stock has gained more than 31% in recent weeks, but still trades at roughly 3x EV/EBITDA, below peers near 3.5x. |
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| Higher oil prices now give that production growth more earnings leverage. The obvious risk is the reverse: a sustained fall in crude would quickly narrow it. |
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| Data correct to 11.09.2026 |
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