Energy stock-tracking exchange-traded funds were among Tuesday’s highest flyers.
All it took was a momentary breakdown in technology stocks to get energy stocks moving again. Today, ETFs tracking energy stocks were among the highest flyers on Tuesday.
The SPDR S&P Oil & Gas Equipment & Services ETF (XES) climbed 2.7%, while the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) gained 2.6%. Meanwhile crude futures-tracking United States Oil (USO) rose 0.84%.
So is the pickup in energy sustainable? Maybe. A Morgan Stanley report published yesterday pointed out that price-to-earnings multiple expansion hasn’t been confined to the technology sector. Multiples have been rising across the board. Valuations for nearly 80% of industry groups have been rising since the election and are at the highest level since the early 2013 to early 2015 period, according to the report. The energy sector has been the only exception.
Fundstrat Global Advisors’ Sam Doctor recommends a good dose of energy stocks based on his model.