Oil Spikes, Great Earnings Get Punished & More Volatility Ahead - Top 3 This Week

Oil is climbing again, some of the best earnings reports of the year are being met with falling share prices, and the second half of the year may be bumpier than the first. Allan Small walks through the Top 3 Things to consider before you make your next investment decision. With the Middle East conflict escalating again, WTI is back above $87 and Brent crude above $90. Strait of Hormuz vessel traffic has collapsed from 77 ships at the end of June to the single digits, the U.S. Strategic Petroleum Reserve has fallen to its lowest level since 1983, and gas prices in Toronto are pushing $1.80/L. What that means for CPI, core inflation and central bank policy is the question every investor should be asking. Then a look at the expectations problem: Samsung Electronics posted preliminary results on July 7 that rivalled the last two years combined — and the stock fell. Taiwan Semiconductor reported outstanding earnings and sold off. Nvidia has gone essentially nowhere for a year despite mid-70s margins and 80% earnings growth. Apple heads into earnings on a big run-up, while Microsoft sits well below its highs. Are the names you're buying cheap, or priced to perfection? Finally, three reasons to expect more volatility in the second half: September seasonality, midterm election year underperformance, and the Middle East. Not a reason to panic — a reason to be prepared.