Wells Fargo, BofA strategists say it’s time to buy oil stocks

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United States,Economy,Toronto

Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow

Wells Fargo senior global market strategist Sameer Samana thinks investors should buy the dip in the crude oil sector,

“The sell-off has been driven primarily by concerns of slowing economic growth in the U.S. as well as worries that planned future increases in oil production by the Organization of the Petroleum Exporting Countries will overwhelm demand, leading to further declines. Our view is that markets are probably overreacting to both issues, which presents an opportunity in Commodities and the Energy equity sector. With respect to U. S.

Wells Fargo energy analyst Roger Read focuses primarily on U.S. companies but does have an overweight rating on Suncor Energy.BofA Securities equity and quantitative strategist Savita Subramanian is adamant that a new U.S. market cycle is underway and that large-cap value stocks are set to outperform,

“We remain constructive on the S&P 500 for largely the same reasons as in but our conviction has waned given the thawing of extreme bearish sentiment … Stagflation is back on bears’ lips. But zooming out from the last few quarters reveals that delinquencies, PMI, labor tightness, retail sales, and most other gauges of economic health are simply normalizing from unsustainably high levels.

“Most market participants have been eagerly awaiting this cut, and there will surely be a psychological boost now that the peak of this rate cycle has most likely been set.

 

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