odin

What Do High Energy Prices Mean for Equities?

All part of the green shoots. The lower the quality of earnings, the higher the pop in this recent rally. Financials traded like options -- I am not too surprised. However, given the wide contango in oil, should a high-risk, capital intensive, environmentally sensitive business, it does appear that the beta of energy stocks actually moderated.

I, too, expect the beta of energy stocks to pick up. Whether or not the green shoots wither.

And speaking directionally, if the inflation story does not pan out and given that storage costs inevitably are rising/will rise in the positive carry trade environment (esp. as additional storage becomes harder and harder to find), spot oil will find the landing very hard indeed. Energy companies, esp. those with leverage, will not find the environment to their liking. May be some sort of a energy/industrials pair trade?