energy stocks

Spanish stocks and the euro fell, while Spanish government bond yields hit their highest levels in over a month after Catalan secessionists delivered an unexpected blow to the government of Spanish PM Rajoy by winning the Catalan regional election. Meanwhile across the Atlantic, U.S. equity futures and the dollar rose on the last trading session before the Christmas holiday. The MSCI index of world stocks was flat.

Authored by Lance Roberts via RealInvestmentAdvice.com,

I have been getting a tremendous number of emails as of late asking if the latest rally in oil prices, and related energy stocks, is sustainable or is it another “trap” as has been witnessed previously.

With geopolitical turmoil mounting, for North Korea to Iran, and as natural disasters have rocked the refinery capital of the world (Houston,) the question is not surprising.

In what is by far the most entertaining research report of the day, Canaccord quant Martin Roberge, essentially admits and apologizes for blowing up the bank's energy client returns in 2017 (with an endless long oil reco), but then - in a bizarre follow up - says that while Canaccord overweight rating on energy has been "costly and like many investors, we feel like throwing in the towel on the group. However, being wrong is not a good reason enough to change one’s stance."

European and Asian shares, the dollar and crude all rose before President-elect Donald Trump’s first press conference since July at 11am on Wednesday, while S&P futures are little changed. Surging raw-materials stocks sent Asian stocks higher. Oil rebounds from the lowest level in a month.

While one can blame algos and "macros" for snapping up oil the commodity, as Morgan Stanley did recently, another question is who is the relentless buyer of energy stocks to a level that makes little sense from a forward P/E multiple.