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Random Gleanings: Energy and Everything Else Thumbnail

Random Gleanings: Energy and Everything Else

Random Gleanings


One Sector of the Economy is not like the others.  The pain you are experiencing at the pump is being seen in the performance of energy company stocks that have long underperformed other sectors of the economy.  Chris and Jesse examine this change in leadership in this episode of Random Gleanings.  


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Charts from this episode below...


As the episode title suggests, year-to-date from a returns standpoint there has been Energy... and everything else.


In one week the probability of a Fed rate hike of between 0.50% - 0.75% to 0% - 0.25% has shifted dramatically.  An indication that given some new developments (see: Russia invades Ukraine) the Fed is more likely to slow down their rate hike cycle.


This chart and the next (below) are data points of interest in the shifting tides of momentum.  This chart looks at the shift of commodities versus stocks, where stocks have started to underperform commodities...


...whereas this chart looks at energy (a subset of the commodity index) has not only made a dramatic turn in outperforming technology stocks (a subset, of course, of the S&P 500), but has just broken above the significant level of early 2000.  The major takeaway is that these "regime changes" of sector leadership can last for years.  This, of course, is not a predictive or guarantee of future results, but some historical perspective to chew on.