The Energy Sector To Watch In 2021
The year 2020 has been unusually volatile for the U.S. financial market, but more so for the energy sector thanks to nationwide lockdowns and subsequent fuel demand destruction. It’s become a recurring theme, but the oil and gas sector has again emerged as the worst performer among America’s 11 sectors for the 11th straight year.
Indeed, Refinitiv data shows that the S&P 500 earnings growth rate would have only declined 2.3% when you exclude the energy sector instead of the 6.5% when you include it. That’s quite damning for the index’s smallest sector, representing just 2.3% of the index in aggregate market cap weighting.
But that does not automatically mean that the sector has become totally uninvestable.
In fact, here’s a big secret: Not only has the Energy Select Sector SPDR Fund (XLE) climbed 23% over the past one-and-a-half months, but in today’s battered energy sector, the best place to be is at the end of the line – the gas pump. Read More