Community Trust ScoreVerified
Steve Weiss is getting out. Not completely, but enough to notice — he’s now sitting on roughly 25% cash, and he’s not ruling out pushing that number higher.
Weiss, founder and managing partner of Short Hills Capital Partners, sold his position in Cisco outright and trimmed his holdings in Meta Platforms. The moves came as two big macro forces slammed into equity markets at once: the 10-year Treasury yield climbed to 5.27%, its highest point since 2007, and Brent crude oil blew past $105 per barrel. Together, those two numbers are basically a headache for anyone long stocks right now. Bonds get more attractive when yields rise, equity valuations get hit, and rate-sensitive sectors — real estate, utilities, consumer discretionary, financials — take the worst of it. Throw expensive oil on top, and you’ve got a Federal Reserve that probably can’t ease up anytime soon.
Weiss thinks the 10-year yield settles somewhere around 5%, but he’s not dismissing a move toward 6%. On oil, he’s pretty much resigned — geopolitical factors tied to Iran, he says, make a meaningful price drop unlikely.
The Committee Is Split
Not everyone on CNBC’s Investment Committee sees it the same way. Jim Lebenthal from Cerity Partners is fully invested. His argument: earnings growth can still hold up stock valuations. He points to the market’s forward earnings multiple, which has dropped from 22 to 18.5 this year — a real compression, and one he seems to think makes stocks look more reasonable than the doom-and-gloom crowd wants to admit.
So you’ve got two money managers, same data, completely different calls. Weiss is raising cash. Lebenthal is staying in. That’s not unusual — markets run on disagreement — but the gap between them is pretty wide right now.
Another committee member flagged ongoing weakness across key sectors, including real estate, utilities, consumer discretionary, and financials. Part of that decline, the argument goes, came from expectations that oil prices would fall before the midterm elections. They didn’t. That miscalculation added another layer of uncertainty for investors who had positioned around a softer energy market.
Oil, the Strait, and Earnings Season
The Strait of Hormuz is sitting in the background of all of this. Negotiations to reopen it haven’t gone anywhere yet. No deal, no relief on supply. And without some kind of breakthrough there, oil prices aren’t coming down on their own. That matters because cheaper energy could take real pressure off the market — David Spika of Turtle Creek thinks a 5% to 10% stock market gain by year-end is possible if oil prices fall. That’s a big “if,” though, and right now the stalemate isn’t moving.
Earnings season is the next real test. Fundstrat’s Tom Lee made the point that higher borrowing costs hit weaker companies harder than stronger ones — a bifurcation that’s going to show up in the numbers. The question is whether corporate profits can actually grow fast enough to justify current valuations while the 10-year sits above 5% and energy costs stay elevated. That’s a tough bar.
It’s not clear yet how many companies can clear it.
Weiss’s read is that the macro environment is too hostile to stay fully exposed. Cash gives him flexibility. If yields come down, if oil breaks, if the Strait deal happens — he can redeploy. But sitting at 25% cash while waiting for clarity isn’t the same as calling a crash. It’s more like acknowledging that the risk-reward on equities has gotten murky and he’d rather not be caught fully loaded if things get worse.
Lebenthal’s counter is that earnings can carry the market. The multiple compression from 22 to 18.5 is real, and if companies can grow into those valuations, stocks don’t need a macro tailwind to hold up. He’s betting on corporate fundamentals over macro fears.
Both arguments have merit. That’s kind of the problem — there’s no clean answer here, and the data supports caution and confidence depending on what you weight more.
What’s clear is that the 10-year at 5.27% and oil above $105 are not small variables. These aren’t background noise. They’re the story. Sectors that depend on cheap borrowing are already showing it. The Fed’s path forward stays constrained as long as energy prices keep inflation sticky. And investors who expected oil to soften by now are recalibrating.
Weiss is at 25% cash. He may go higher.
Frequently Asked Questions
What stocks did Steve Weiss sell or trim?
Weiss sold his position in Cisco entirely and trimmed his holdings in Meta Platforms as he raised his cash allocation to approximately 25%.
What level has the 10-year Treasury yield reached?
The 10-year Treasury yield hit 5.27%, its highest level since 2007, putting significant pressure on equity valuations across rate-sensitive sectors.
Why It Matters
Weiss's decision to increase cash holdings amid rising Treasury yields and surging oil prices signals a growing concern among investors about the sustainability of current equity valuations in a tightening monetary environment. The 10-year yield reaching its highest level since 2007 reflects heightened inflationary pressures and potential shifts in Federal Reserve policy, which could further impact market liquidity and investor sentiment. Such strategic moves by prominent investors may indicate a broader trend of risk aversion as market participants reassess their positions in light of these macroeconomic challenges.
