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Bank of Amer­ica call: Buy en­ergy stocks

Chicago Sun-Times - - AMERICA’S MARKETS - Adam Shell @ adamshell USA TO­DAY

En­ergy stocks have been beaten up enough this year to make them at­trac­tive again. It’s the op­po­site story for shares of com­pa­nies that sell dis­cre­tionary goods to con­sumers. They’ve been per­form­ing well early in 2017, but it might be wise to lighten up on them as fu­ture gains might be harder to come by.

That was the mar­ket call out Mon­day from Bank of Amer­ica Mer­rill Lynch eq­uity strate­gist Savita Subra­ma­nian.

En­ergy stocks in the Stan­dard & Poor’s 500 stock in­dex, which have been hurt by a 11% drop in the price of a bar­rel of U. S.- pro­duced crude since its Feb. 23 high, are down nearly 8% this year. That ranks last among the 11 main sec­tors in the in­dex. The con­sumer- fo­cused sec­tor, in con­trast, has ral­lied 7.1%.

Subra­ma­nian told clients: “We now see sig­nif­i­cantly more up­side in en­ergy.” A key pil­lar of Subra­ma­nian’s bullish en­ergy call is that her firm ex­pects the price of U. S. crude to re­bound to above $ 70 per bar­rel by June.

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