Carter Worth, Worth Charting, joins 'Fast Money' to track what the charts are saying in the energy sector as it leads to the downside in today's trading session.
If you're interested in broad exposure to the Energy - Broad segment of the equity market, look no further than the Energy Select Sector SPDR ETF (XLE), a passively managed exchange traded fund launched on 12/16/1998.
The energy sector has significantly outperformed the broader market year-to-date in 2025. While the S&P 500 has struggled, with the SPY ETF down nearly 9% from its 52-week high and 5% YTD, the Energy Select Sector SPDR Fund NYSEARCA: XLE has surged over 9% as of the first quarter's close.
The latest oil price correction is overdone and I see several catalysts that could trigger a rebound. The leading catalysts include usually low strategic petroleum reserves, crude stocks inventory, and also the potential of more favorable policies for domestic production. XOM is better positioned to benefit in case of an oil price recovery than the sector average, represented by XLE, for several reasons.
The energy sector began its correction around inauguration day, ahead of other sectors, a potential sign of an impending recession. Geopolitical risks and supply constraints may push oil prices up long-term, but current demand slowdown, currency volatility, and tariffs present headwinds. Trump's plan to rapidly refill the Strategic Petroleum Reserve looks less likely. SPR purchases are slower under the new administration than Biden's in 2024, weakening the demand outlook.
Energy Select Sector SPDR® Fund ETF has more momentum compared to its peers, thanks to a 3.28% dividend yield, but it holds fewer stocks in its portfolio. The market is experiencing a cyclical rotation from high P/E sectors like tech to low P/E sectors like energy and real estate. A similar imbalance to the dot-com bubble, which was followed by a subsequent increase in energy stock prices.
Francisco Blanch, BofA Securities commodity snd derivative strategist, joins 'Power Lunch' to discuss the global GDP and energy consumption.
Understanding economic and business cycles is crucial for investing; secular trends often outweigh basic economic cycles in importance. I am downgrading XLE from 'Strong Buy' to 'Hold' due to expected declines in Brent Crude Oil prices and increased energy supply. Energy Select Sector SPDR Fund's performance has been strong, but with plateauing profits and a modest 3.28% yield, future returns may disappoint investors.
Designed to provide broad exposure to the Energy - Broad segment of the equity market, the Energy Select Sector SPDR ETF (XLE) is a passively managed exchange traded fund launched on 12/16/1998.
Passive investors looking to take on a more contrarian position in the new year may wish to consider some of the sectors that most investors may be ignoring as the rise of the artificial intelligence (AI) boom continues.
As A.I. stocks rally on news of the Stargate project, @Theotrade's Don Kaufman's stays bullish on Broadcom (AVGO) due to its ability to ride on co-tails of leaders like Nvidia (NVDA). He later breaks down his bullishness in Nike (NKE) and bearishness in the energy sector (XLE).
Donald Trump is set to be sworn in as the 47th president of the United States today. The new administration is expected to bring a wave of policy shifts.