Wall St Week Ahead: Recession fears pose challenge to energy shares after stellar year
A potential U.S. recession and tough comparisons to a stellar 2022 are weighing on the prospects of energy stocks delivering an encore to last year’s stunning run, despite valuations that are seen as still comparatively cheap.
The S&P 500 energy sector is up 4.2% year-to-date, slightly lagging the rise for the broader index. The sector logged a 59% jump in 2022, an otherwise brutal year for stocks that saw the S&P 500 drop 19.4%.
Energy bulls argue the sector’s valuations bolster the case for a third-straight year of gains, which would be the first such feat for the group since 2013. Goldman Sachs, RBC Capital Markets and UBS Global Wealth Management are among the Wall Street firms recommending energy stocks.
