Diesel Prices Keep Pressure on Fed and Markets

Watch on YouTube ↗  |  September 19, 2026 at 13:39  |  7:50  |  Bloomberg Markets
Speakers
Joe Quinlan — Head of Market Strategy, Merrill & Bank of America

Summary

Joe Quinlan, head of market strategy at Merrill and Bank of America Private Bank, discusses the Fed's unanimous quarter-point rate hike and the market outlook. He highlights elevated diesel prices as a major concern for businesses and the Fed, while remaining positive on equities and tech buy-the-dip opportunities. He also says housing will be weak due to high mortgage rates, but other parts of the economy remain robust.

  • Fed raised rates by a quarter point with unanimous support.
  • Joe Quinlan sees diesel prices as a key inflation and market pressure point.
  • He expects diesel supply tightness to persist, keeping the Fed in play.
  • He favors buying tech, software, and semiconductor dips.
  • He says US equities are supported by a robust economy, though diesel may cap near-term upside.
  • He expects housing to weaken on near-7% mortgage rates.
  • He notes aviation, trucking, and manufacturers are squeezed by diesel costs.
  • He flags China AI competition and US-China regulatory uncertainty.
Ideas
Joe Quinlan Head of Market Strategy, Merrill & Bank of America 1:18
US equities supported by robust economy.
Equities are okay with higher rates because the US economy is robust in nominal and real terms, and the market is near all-time highs. Near-term diesel costs may keep the market in check, but once diesel supply pressures clear, the market can move higher.
SPY MED
Joe Quinlan Head of Market Strategy, Merrill & Bank of America 2:06
Housing weak on high mortgage rates.
The housing market is going to be tough: 30-year mortgage rates near 7% and a sharp weekly rise will slow housing, which is about 17% of GDP and likely to go backward. Other parts of the economy are robust enough to prevent broader damage.
ITB MED
Joe Quinlan Head of Market Strategy, Merrill & Bank of America 3:26
Buy tech dips as productivity cycle early.
Merrill clients buy pullbacks in tech, software, and some semiconductors because valuations remain attractive, productivity adoption is still early innings, and the earnings backdrop over 2027-2028 remains good. Upward momentum should continue.
XLK IGV SMH HIGH
Joe Quinlan Head of Market Strategy, Merrill & Bank of America 5:48
Diesel stays elevated on tight supply.
Diesel prices are elevated and a real pain point: refining capacity has been taken offline, China is restricting refined exports, reserves are low, and countries are stockpiling ahead of winter, so supply tightness is unlikely to resolve soon. This keeps diesel prices elevated and keeps the Fed in play.
HO=F HIGH
Joe Quinlan Head of Market Strategy, Merrill & Bank of America 5:51
Diesel costs pressure airlines, trucking, manufacturers.
Aviation, truckers, and manufacturers say diesel costs are their number one concern, replacing labor shortages. Elevated diesel is a real pain point for these sectors and pressures margins/profits.
Aviation XTN Manufacturers MED
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This Bloomberg Markets video, published September 19, 2026, features Joe Quinlan discussing SPY, ITB, XLK, IGV, SMH, HO=F, Aviation, XTN, Manufacturers. 5 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Joe Quinlan  · Tickers: SPY, ITB, XLK, IGV, SMH, HO=F, Aviation, XTN, Manufacturers