Liz Looks at: Energy | SoFi
Abstract
One is the Loneliest Number Energy is the only sector in the S&P 500 that's positive over 3-month, 6-month, and year-to-date periods. Even still, Energy has outperformed all three of those sectors by more than 43 percentage points. The Energy sector has fallen almost 20% since its most recent high on June 8th, with WTI Crude Oil prices down 16% and Natural Gas down 22% over the same period. Even with the recent fall, oil prices are still ~60% higher than they were pre-pandemic, which has given a boost to Energy companies who make a profit off of rising prices. Energy may be one of the only sectors still set to raise earnings guidance for the rest of the year given the persistently high demand and elevated price of oil. Despite the S&P 500 market cap now being back to where it was one year ago, the market cap of the Energy sector has more than doubled. The devil's advocate argument is one I already made - that energy stock prices don't necessarily follow energy commodity prices - but they're related enough for me to feel like the chance of disappointment over the next 12 months is higher than the chance of positive surprises.
