US stocks have been sliding, as higher yields and oil prices continued to worry investors. We are recommending you swap into the Vanguard Primecap Fund (VPMCX), notes Brian Kelly, editor of MoneyLetter.
Futures for Brent crude just surpassed the $100-per-barrel mark for the first time since July. Turmoil in the Strait of Hormuz continues to be a major contributor. Meanwhile, Treasury Secretary Scott Bessent said his department would triple its buyback of longer-term government debt. The move — initially — pushed yields higher rather than lower.
Our four major global stock markets were mixed during the one-week reporting period. From Sept. 3 through Sept. 9, the S&P 500 Index (^SPX) was 0.4% lower; the Euro Stoxx 50 declined 0.8%; the Nikkei 225 advanced by 1.3%; and the Shanghai Composite gained 0.3%.
Vanguard Primecap Fund (VPMCX)
For now, traders seem skeptical of Treasury’s strategy. Sprinkle in a Federal Reserve policy meeting scheduled for next week, and uncertainty is prevailing.
Although the president has asked Fed Chair Kevin Warsh to cut short-term rates, we strongly believe this will not happen. The Fed is more likely to invoke a 25-basis point hike (62% odds) or hold steady (38%).
As for VPMCX, the fund seeks long-term capital appreciation. It invests in stocks considered to have above-average earnings growth potential that is not reflected in their current market prices. Its portfolio consists predominantly of large- and mid-capitalization stocks.
