Another sector worth considering is energy, specifically the large integrated oil companies, which are starting to respond to recently rising oil prices. The catalysts for last week’s rally: a further drop in the U.S. oil rig count, which indicates supplies may tighten and push prices higher, as well as the GDP acceleration in Europe. We believe this signals some stabilization in the global economy and, by extension, demand for oil. The S&P Global Energy Index is up roughly 13% from its recent lows and is now positive year-to-date. We continue to see value in this segment of the market.
Source: Bloomberg
Russ Koesterich, CFA, is the Chief Investment Strategist for BlackRock. He is a regular contributor to The Blog and you can find more of his posts here.