Name: ‘Deeper Correction' Ahead: 40% Downside Risks Warns Fund Manager | Chance Finucane
Uploaded: 2026-07-16T20:33:56+00:00
Duration: 1950 s

Speakers

Chance Finucane — Chief Investment Officer of Oxbow Advisors

Summary

Chance Finucane, CIO of Oxbow Advisors, outlines the firm's rotation back into energy and precious metals after recent pullbacks, while avoiding overvalued AI stocks and semiconductors. He expects long-term Treasury yields to keep rising and favors short-term bonds. The equity market looks fully valued with a deeper correction possible in 2027, driving a defensive posture and selective buying in underowned sectors like financials and healthcare.

Rotating back into energy and precious metals after trimming earlier in the year
Avoiding AI stocks and semiconductors due to extreme valuations and 40% downside risk
Preferring short-term Treasuries (1-3 year) over long-term bonds as yields trend higher
Market fully valued with 40% cash allocation; deeper correction expected in 2027
Adding to financials, healthcare, utilities, and consumer staples as momentum rotates out of tech
Geopolitical tensions raising the floor on oil prices, making energy stocks attractive
Recent AI IPOs like SpaceX considered overvalued and best avoided at current levels

Ideas

Chance Finucane Chief Investment Officer of Oxbow Advisors 1:14

Gold and silver correction creates entry

After trimming precious metals in January when gold spiked to $5,500 and silver to $116, Oxbow is now adding back as gold approached $4,000 and silver $60. These levels offer an attractive entry point even if not the exact bottom. They are building positions back toward their average 10% allocation, through physical metals and mining/royalty companies.

Chance Finucane Chief Investment Officer of Oxbow Advisors 1:14

Geopolitical risk raises oil price floor

After trimming energy positions when oil spiked above $110 on the Iran war, Oxbow is rotating back into energy as oil dropped below $70. Geopolitical tensions raise the floor on oil prices, making energy stocks attractive at $70-80 oil. They are adding pipelines, integrated companies, exploration & production, and oil service businesses, expecting increased drilling and repair work globally.

Chance Finucane Chief Investment Officer of Oxbow Advisors 1:53

Market fully valued, correction ahead

The equity market is fully valued, so Oxbow is keeping 40% of assets liquid in short-term Treasuries. They see potential for a deeper decline in 2027 as the economy cycles through tough growth and inflation comparisons, making growth look like it is decelerating.

Chance Finucane Chief Investment Officer of Oxbow Advisors 1:55

Short-term Treasuries offer safe yield

Oxbow is focusing fixed-income positions on short-term Treasuries, investment-grade corporates, and municipal bonds all with maturities of three years or less. This avoids duration risk and allows rolling into higher yields if rates rise. They recently locked in 2-year Treasury yields above 4%.

Chance Finucane Chief Investment Officer of Oxbow Advisors 6:00

Semiconductors overvalued, 40% downside risk

AI beneficiary stocks and especially semiconductors are overvalued. High-quality semiconductors have 40% projected downside in a typical 20-25% bear market. All optimism is already priced in, and momentum in the space is starting to unwind. Oxbow is avoiding the area unless there is a significant drop and change in conditions.

Chance Finucane Chief Investment Officer of Oxbow Advisors 7:05

AI IPOs extremely overvalued, avoid

AI IPOs such as SpaceX, OpenAI, and Anthropic are trading at extreme valuations of 20-70x revenue, versus Google's 8.5x at IPO. Oxbow avoids them, noting that investors can usually get a cheaper price by waiting a year. SpaceX is already down 16% from its first-day close.

Chance Finucane Chief Investment Officer of Oxbow Advisors 11:50

Long-term Treasury yields moving higher

Since 2020 a structural period of higher long-term bond yields has begun. Geopolitical volatility and persistently higher inflation will push 10-year and 30-year Treasury yields higher over the coming years, making long-term bonds a poor place to be outside of short-term trades.

Chance Finucane Chief Investment Officer of Oxbow Advisors 27:22

Rotation into underowned defensive sectors

As momentum players rotate out of semiconductors, money is flowing into financials, health care, utilities, and consumer staples. Oxbow has been incrementally adding to names they like in these oversold sectors, positioning for the rotation.

‘Deeper Correction' Ahead: 40% Downside Risks Warns Fund Manager | Chance Finucane

Summary

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