This was evidenced year-to-date (YTD) as an energy crisis in Europe and across the world is brewing and pushing up the stock prices of energy companies. As a case in point, the exchange-traded fund (ETF) Energy Select Sector SPDR ETF (NYSEARCA: XLE), which tracks the performance of the energy sector, posted a return of over 38% YTD, while the S&P 500 and the Nasdaq returned a -18.52% and -27.08% YTD, respectively. Jefferies analyst Chris Wood joined Bloomberg Markets to discuss the state of the markets and market segments where he sees potential value while reiterating his stance on energy stocks.
Reason for energy
Wood elaborated that he is bullish on the energy sector as he sees no significant demand destruction for energy in the western economies. He also added:
Fossil fuels
Furthermore, the supply chain issues are exacerbating the energy crisis; while the attack on fossil fuels in the past couple of years has shifted the world towards renewable energy; yet, that shift was not done fast enough. At the moment, the demand for oil and gas will likely stay high, keeping energy stocks elevated. Therefore, as a sector, energy seems a compelling invite for market participants. Buy stocks now with Interactive Brokers – the most advanced investment platform Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
