Negative data on American employment, fears of recession, and uncertainty about the Fed’s rate cut had recently influenced the financial markets.
However, some noticed a presumed rotation in financial portfolios, meaning an adjustment of investments from one sector or industry to another in anticipation of the next stage of the economic cycle.
This strategy is based on the fact that the economy moves in reasonably predictable cycles, and different sectors tend to perform better at different stages of these cycles.
The shift is likely towards defensive stocks, which are a type of stock that provides consistent dividends and stable earnings regardless of the state of the overall stock market.
Oil companies have features aligned to defensive stocks, such as stability, consistent dividends, low volatility, and performance in various market conditions.
The performance of oil stocks can be influenced by a variety of factors, including geopolitical tensions, Opec discipline, sanctions, and oil extraction costs.
These factors can lead to rising oil prices, which would support energy stocks even when the economy slows down. (Redazione)
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