This fund manager has to invest in energy stocks but warns the oil rally is unsustainable

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Are you sure energy is a safe haven? Here's why one fund manager is pessimistic on oil prices.

If there’s one place to hide in the current market turmoil, it’s been in the energy sector, as oil prices CL.1, +1.16% have surged to eight-year highs. RBC Capital Markets, for instance, just threw in the towel on its underperform call on Exxon Mobil XOM, +1.68%, flatly saying it was “wrong” about the oil giant, which was one of the handful of S&P 500 components to climb on Tuesday.

There’s also potential, he added, for productivity gains to pressure the cost curve for oil. Rig productivity in the Permian Basin should eventually catch up with that of the Bakken region. The chart Are rising yields so bad for stocks? Historically, not so much, at least according to this chart from Callie Cox, investment analyst for eToro, who said the average 12-month return on the S&P 500 SPX, -1.84% of 9% after bond-yield spikes. “Stocks tend to like higher yields, they just take a while to digest,” she said. Not pictured, but the Nasdaq-100 NDX, -2.57% historically also has seen strong 12-month returns, of 16%, after yield spikes, she noted.

A leading Tesla TSLA, -1.82% shareholder asked the company to issue deliveries guidance above Wall Street estimates.

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Mid stream energy stocks are under valued.

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