MILAN, Dec 14 Reuters After two straight recordbreaking years, investors that profited from booming oil stocks are now betting on a temporary retreat, as recession threatens economies in the United States and Europe.

A gauge of global energy stocks is set to rise over 35 for a second year in a surge that has propelled Exxon Mobil39;s stock to lifetime highs and caused the price of most other oil majors to double or triple from 2020.

But that rally now looks overdone given a darkening macro outlook and the drop in oil , , which has almost lost all its gains this year. That has led some strategists and portfolio managers to position for a pullback that could last months until damage from the likely recession becomes clearer.

Longtime energy bull Marko Kolanovic, a global markets strategist at JPMorgan, is among those who have called time on the rally, suggesting investors jump back only once the broader market drops 2030.

We believe that there is a tactical trade to sell energy stocks. The catalyst for convergence would be a pullback in the broad equity market, Kolanovic wrote in a note to clients, even as he said longterm attractiveness of oil stocks was intact.

Like most cyclical stocks, energy will struggle in a severe downturn. Citi estimates energy has been the worstperforming sector across geographies during past contractions with earnings per share falling by 53 to 124.

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