Ok, so everyone knows energy equity has underperformed this year.
And one of the most interesting things about that underperformance is the juxtaposition with Energy credit, which has remained remarkably resilient despite episodic bouts of crude carnage.
Well, as you consider the collapsing dollar – which, you’re reminded, has gone nowhere but down since April 12 when Trump famously proclaimed that dollar strength was “partially my fault because people have so much confidence in me”…
… do consider that the The S&P 500 Energy Index/S&P ratio is now at its lowest level since 2004:
The obvious question there, is whether a weaker dollar could ultimately save the day.
As Bloomberg noted earlier today, “Leuthold Group’s Jim Paulsen sees a lower dollar as a potential catalyst for a rebound [as] the energy/S&P 500 ratio tends to advance when the Dollar Index drops, and vice versa.”
So if Energy stocks do rebound, you can thank Trump.