What to watch
Bank of America call: Buy energy stocks
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.