Wall Street Giants Dump Meta (META) and Flee to Cash...Warning of 6% Treasury Yields, $95 Oil Shock

▲ Wall Street, International Oil Prices/AI Generated Image

As the U.S. 10-year Treasury yield soars and international oil prices surpass $95 per barrel, Wall Street experts are increasingly moving to sell stocks and secure cash.

U.S. broadcaster CNBC focused on diagnosing the ripple effects of the rebound in Treasury yields and rising oil prices on the New York stock market in a broadcast on September 28 (local time). Experts unanimously agreed that with the 10-year Treasury yield rising to 5.26% and West Texas Intermediate (WTI) crude oil approaching the $95 mark, the market should prepare for the possibility of further shocks.

Investor Stephen Weiss stated that he has begun building a defensive position, citing a high probability of interest rates rising to 6% with the 5% mark serving as support. Weiss said, “There is no reason for the 10-year yield to come down, and the rise in oil prices is bound to continue amid geopolitical crises in the Middle East. I have completely sold Cisco Systems Inc. (CSCO) and reduced my Meta Platforms Inc. (META) holdings, increasing my cash allocation to approximately 25%.”

Conversely, fund manager Jim Lebenthal maintained a bullish stance based on robust economic growth and corporate earnings. Lebenthal countered, “The price-to-earnings ratio (PER) has decreased from 22x at the beginning of the year to 18.5x currently, reducing the burden, and the price/earnings to growth ratio (PEG) is also below 1, making it an attractive range. Despite the sharp rise in oil prices and interest rates, the market has held up well, and the earnings season will be a catalyst to push the stock market higher again.” He suggested focusing on the energy sector, where demand for oil infrastructure reconstruction is expected, and the healthcare sector, which offers attractive dividends, in addition to tech stocks.

Market panelist Joe Terranova pointed out that many investors' positions have become entangled ahead of the October market entry. Terranova diagnosed, “Expectations that oil prices would fall after Labor Day and that the government would suppress interest rates have been proven wrong, leading to severe downward pressure on interest-rate-sensitive stocks over the past 30 days. With a clear downward trend continuing in the real estate, utility, consumer discretionary, and financial sectors, a conservative approach is inevitable unless a solution to the Middle East crisis emerges.”

[Article Key Summary]

-As the 10-year Treasury yield rose to 5.26% and WTI approached $95, Wall Street veterans entered a defensive posture.

-Weiss warned of interest rates breaking 6%, fully divesting Cisco and reducing Meta's weighting to increase cash allocation to 25%.

-Lebenthal countered with a further upside argument centered on energy and healthcare, based on solid corporate earnings and reduced stock valuations.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*