Why oil no longer rules the stock market

  25 December 2019    Read: 1153
  Why oil no longer rules the stock market

Things are looking pretty good for the average American investor at the moment, with the S&P 500 still taking out new highs and a 27.3 percent YTD gain rivalled only by Russia’s RTS Index 39.2 percent return over the timeframe on the global arena.

Rising stock valuations are awesome for investors holding stocks in their portfolios--but not so great for those holding cash waiting for good entry points. 

For investors who prefer to go shopping for bargains when there’s blood in the streets, the good news is that in every bull market there’s almost always a bear market tucked away somewhere. 

And currently there’s no bigger bear than the energy sector.

While the tech sector continues hogging the limelight (and the dollars), the energy sector has been attracting attention for all the wrong reasons. 

The tech sector has continued to shoot the lights out, totally eclipsing the energy sector, which has badly lagged almost every other sector in the US financial markets. 

The tech sector’s favorite benchmark, the Technology Select Sector SPDR Fund (XLK), has climbed 45.3 percent YTD and an amazing 305 percent over the past decade. 

In sharp contrast, the Energy Select Sector SPDR Fund (XLE), which has energy heavyweights ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX) as its biggest components (43.51 percent combined weighting), has only managed a mere 7 percent YTD gain and 9.3 percent over the decade.

 

oilprice.com


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