Short-term interest in the best performing energy sector rises to its highest since 2020 (NYSEARCA:XLE)
Short-term interest in US energy stocks, the best performing stock sector this year, rose to 3.9%, the highest level since October 2020, The Wall Street Journal reported this week, citing S&P Global Market Intelligence.
In In comparison, the average short-term interest rate across the entire S&P 500 sits at 2%, according to the report.
Even after giving up some gains, the S&P 500 energy sector is up 53% year-to-date, compared with the S&P 500’s 22% drop and a complete reversal from years of weakness – and a Some traders believe that this kind of good performance cannot last.
Opponents of the group note that oil prices have fallen below their year-to-date highs and with the world potentially heading for a recession, demand for oil tends to weaken as business activity continues. slow down.
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But many on Wall Street believe energy stocks have more room to run, including Goldman Sachs, which forecasts Brent crude will rise to $115 a barrel over the next six months, and the stocks’ performance. Energy is often strongly correlated with oil prices. .
Goldman said energy stocks have historically been the best growth stocks in the market given below-average economic growth and higher-than-expected inflation.