Weiss Ratings backs HALO stocks as inflation pressures build in the U.S.

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Weiss Ratings: HALO stocks & inflation

Highlights

Weiss Ratings reports April PPI rose 1.4% month over month, pushing annual PPI to 6.0%, the highest since December 2022, with energy and tariffs as key drivers.
Weiss warns traditional bonds and cash-heavy portfolios face risk if inflation persists, favoring HALO stocks—energy, materials, utilities, and infrastructure with strong physical assets and pricing power.
State Street Energy Select SPDR (XLE), with top holdings Exxon Mobil, Chevron, ConocoPhillips, a 0.08% expense ratio, and a 2.5%-2.7% yield, is highlighted as breaking resistance amid inflation pressures.

Inflation signals and the HALO investment case

As reported by Weiss Ratings, the April Producer Price Index from the Bureau of Labor Statistics shows wholesale inflation rose 1.4% month over month, lifting the annual headline PPI to 6.0%, the highest level since December 2022. The analysis says this indicates mounting cost pressure at the front end of the supply chain, led by gains in gasoline, diesel and jet fuel.

The note links that producer-price acceleration to a lagged effect on consumers. It points to the BLS Consumer Price Index report released on May 12, 2026, which shows headline inflation at 3.8% year over year for April, and argues that the latest producer-price increases have not yet fully passed through to households.

Weiss Ratings compares the current backdrop with 2021, when PPI moved above 6% before CPI followed months later. It says pandemic-era supply chain disruptions, energy demand and fiscal stimulus drove that earlier cycle, while the present environment is being shaped by tariffs and higher energy-related costs.

The commentary also cites tariffs imposed by President Trump, including rates ranging from 10% to 41% starting in April of last year and an additional 10% tariff in February, as factors that are raising producer costs. It adds that the war with Iran and the blockade of the Strait of Hormuz are increasing prices for oil and other inputs such as helium, aluminum and fertilizer materials.

Sector positioning and market implications

Against that backdrop, Weiss Ratings says cash-heavy portfolios and conventional bonds are vulnerable if inflation remains embedded in the pipeline. It instead favors so-called Heavy Assets, Low Obsolescence, or HALO, stocks, defined as companies with hard-to-replace physical assets, pricing power, positive free cash flow and manageable refinancing needs.

The preferred areas include energy, critical materials, precious metals, utilities and infrastructure. The analysis argues these businesses are better placed to pass rising input costs on to customers, which can help protect margins and support equity performance during inflationary periods.

As an example, the note highlights the State Street Energy Select SPDR, ticker XLE, which holds U.S. oil and gas companies across exploration, production, refining, pipelines and oilfield services. Weiss Ratings says the fund's largest holdings include Exxon Mobil, Chevron and ConocoPhillips, and notes its 0.08% expense ratio and dividend yield in the 2.5% to 2.7% range.

The commentary says XLE is trying to break overhead resistance and could move above the high set after the war with Iran began. More broadly, the message to investors is that further consumer-price pressure is still ahead, making inflation-sensitive sectors a key area of focus.

In our earlier article on UK inflation and portfolio hedges, we looked at how elevated price growth and pressured bond markets are forcing investors to rethink what best preserves purchasing power. We noted that cash and fixed-rate bonds can struggle when inflation stays sticky, while equities have historically provided more consistent long-term inflation protection, with inflation-linked bonds offering only partial coverage due to real-rate and technical risks.

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