Your thoughts on the 2022 market so far?

[fenders53]

(02-01-2022, 03:30 PM)bankerboy Wrote: Two words come to mind about 2022 so far..

Roller Coaster


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Only 11 more laps to go on this ride.     There are going to be a few more months like January.

[rnsmth]

Oil and gas names surge again; sector up 23% YTD vs. S&P loss

Feb. 01, 2022 4:30 PM ETEnergy Select Sector SPDR ETF (XLE), XOMIYE, XES, IXC, FCG, FENY, OIH, VDE, XOP, WMB, PXD, HES, EOG, COP, VLO, OXY, MRO, APA By: Carl Surran, SA News Editor23 Comments

The energy sector (XLE +3.6%) closed comfortably at the top of Tuesday's S&P sector standings, even as crude oil prices barely budged, extending its strong start to the year with a 23% gain compared with a 5.4% loss in the broader S&P 500.

Exxon Mobil (XOM +6.4%) provided strong sector leadership, rallying to its best level since April 2019 after reporting blowout quarterly results and issuing strong capital spending guidance.

Exxon racked up its biggest profit since 2014 and said cash flow from operations reached the highest since 2012, and it expects to see a steady reduction in its breakeven oil price to an average of $35/bbl through 2027.

The company also flagged a massive 25% increase in Permian Basin production this year, well above most of the rest of the oil industry.

Among other major sector stocks posting multiyear highs during the day: MRO +6%, APA +4.5%, OXY +4.3%, VLO +4.3%, COP +3.3%, PXD +2.4%, WMB +1.9%, EOG +1.5%, HES +1.3%.

ETFs: XLE, XOP, VDE, OIH, FENY, FCG, IXC, XES, IYE

Oil and gas stocks in January posted their best month in nearly a year, in an environment of oil prices at their highest since October 2014 and analysts forecasting $100/bbl oil sooner or later.

[ken-do-nim]

I don't buy this recovery; the rate increases are still coming. Going to be a tough year, but I see clear skies once the inflation/rate increases/covid dies down. Unless, of course, WWIII starts over Ukraine.

[fenders53]

(02-01-2022, 06:57 PM)ken-do-nim Wrote: I don't buy this recovery;the rate increases are still coming.  Going to be a tough year, but I see clear skies once the inflation/rate increases/covid dies down.  Unless, of course, WWIII starts over Ukraine.

This may sound like hocus pocus but it's simply an oversold bounce IMO.  Even in the worst of times stocks don't just drop almost everyday for a month without any relief.  Some will run away and hide for a long time, but at some point it gets too tempting to try to find a deal, whether a long-term buy or just a trade.  When the sellers look fatigued the institutions start covering shorts and here we are.  2022 will have many chapters.

And regarding Ron's oil post.  Eventually oil runs until it threatens the economy, so add that to the market stew.  After that the frackers will drill too much and fix the problem.  We've seen this oil movie before.  We are in the fourth inning with Covid crash made oil briefly worthless.  That was the opening pitch.          

And a year from now rates will be up 1-1 1/2% and we won't care. We'll have new financial drama to deal with. 

Be thankful we don't own a lot of small caps.  We are whining compared to their 12 months of woes and I don't necessarily mean the meme stocks.

[rnsmth]

(02-01-2022, 07:30 PM)fenders53 Wrote:

(02-01-2022, 06:57 PM)ken-do-nim Wrote: I don't buy this recovery;the rate increases are still coming.  Going to be a tough year, but I see clear skies once the inflation/rate increases/covid dies down.  Unless, of course, WWIII starts over Ukraine.

This may sound like hocus pocus but it's simply an oversold bounce IMO.  Even in the worst of times stocks don't just drop almost everyday for a month without any relief.  Some will run away and hide for a long time, but at some point it gets too tempting to try to find a deal, whether a long-term buy or just a trade.  When the sellers look fatigued the institutions start covering shorts and here we are.  2022 will have many chapters.

And regarding Ron's oil post.  Eventually oil runs until it threatens the economy, so add that to the market stew.  After that the frackers will drill too much and fix the problem.  We've seen this oil movie before.  We are in the fourth inning with Covid crash made oil briefly worthless.  That was the opening pitch.          

And a year from now rates will be up 1-1 1/2% and we won't care. We'll have new financial drama to deal with. 

Be thankful we don't own a lot of small caps.  We are whining compared to their 12 months of woes and I don't necessarily mean the meme stocks.

When it comes to oil, keep an eye on the weekly rig count.

When it comes to 2022, we are 1.3% below our all time high. Maybe that is because we are 19% energy

[fenders53]

(02-01-2022, 07:39 PM)rnsmth Wrote:

(02-01-2022, 07:30 PM)fenders53 Wrote:

(02-01-2022, 06:57 PM)ken-do-nim Wrote: I don't buy this recovery;the rate increases are still coming.  Going to be a tough year, but I see clear skies once the inflation/rate increases/covid dies down.  Unless, of course, WWIII starts over Ukraine.

This may sound like hocus pocus but it's simply an oversold bounce IMO.  Even in the worst of times stocks don't just drop almost everyday for a month without any relief.  Some will run away and hide for a long time, but at some point it gets too tempting to try to find a deal, whether a long-term buy or just a trade.  When the sellers look fatigued the institutions start covering shorts and here we are.  2022 will have many chapters.

And regarding Ron's oil post.  Eventually oil runs until it threatens the economy, so add that to the market stew.  After that the frackers will drill too much and fix the problem.  We've seen this oil movie before.  We are in the fourth inning with Covid crash made oil briefly worthless.  That was the opening pitch.          

And a year from now rates will be up 1-1 1/2% and we won't care. We'll have new financial drama to deal with. 

Be thankful we don't own a lot of small caps.  We are whining compared to their 12 months of woes and I don't necessarily mean the meme stocks.

When it comes to oil, keep an eye on the weekly rig count.

When it comes to 2022, we are 1.3% below our all time high.  Maybe that is because we are 19%  energy

Yes I will watch the rig count.  I wish I had more visibility on small banks willingness to loan money to fly by night frackers.  They go BK, reconstitute and rise from the ashes years later if they can get a loan.  I think they called them "wildcatters" when we were young.  As I said I have no fear this summer when vacation season starts, but it can turn on a dime.  Or I can go read articles from oil bulls that say this goes on for five years.  The truth always lies somewhere in the middle.  Oil supply/demand balance is so fragile.  A few percent away from neutral and prices fly in either direction. I'm afraid to miss the run right now but it won't be long before I worry.  EOG is about my best stock this year, and I won't allow it to become my worst.

[cemanuel]

The 2022 market to date is, IMO, much closer to normal than the unrestrained straight line up we've been having for nearly 2 years. There has been a lot of sector rotation, sometimes day-to-day. But so long as earnings are strong any downward move should be mild. As long as no shooting starts anyway.

[fenders53]

I depends some what index you are talking about though.  Nothing real new I suppose, but the speed at which it flips sectors seems rapid.  If you decide to chase it you don't have six weeks or you likely  bought near the sector top.  It's easier to just be diversified and make smaller trims and adds if that is of interest.  

Oil is one of the few sustained trends I see right now.

[EricL]

I thought this summed up the situation with oil pretty well.

Quote:There isn’t enough oil at prices that don’t blow up the economy to fund the level of GDP growth needed so that the debt doesn’t blow up the economy but if prices rise enough to get enough oil without blowing up the economy it will blow up the debt.

The Fed is in a pickle.

Have to raise rates to kill inflation, but can't raise rates because of $30 trillion in US debt and worries of blowing up the house of cards. GDP can't grow without oil, but the higher price of oil needed to grow production to meet demand will also cause inflation and kill the economy.

Food prices are about the explode too as high energy prices are causing fertilizer shortages which will have an impact on grain production this year.

It's going to be an interesting year...

[bankerboy]

Oil is good for now…glad I took a small position in it at the end of 2020.

Small community banks don’t really lend much into the risky side of the oil industry, it’s the large banks that have industry specialists that do it however and other non bank financing.

And yes they get hammered every so often….I used to work for one…when that happens in those economies it often takes the smaller players down as well. OKC is a good example of a city where the impact of oil is felt everywhere.

I have to think for January we got a bit oversold in the general market space except for leveraged entities like tech. I expect rate hikes will impact their balance sheet quicker than most, many solid C&I companies have lots of liquidity and are a bit more insulated from rate hikes for now.

Will be interesting to see how strong inflation trends continue. I saw an article on Reuters yesterday vaguely saying that inflation might be slowing already.

I’m shooting for a 4-6% return for the S&P this year with the rate hikes. COVID’s impact is fading and folks are tired of the restrictions the blue states have, I see most of those going away before midterms which will help their economies as well.


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[stockguru]

Its buy low and sell high. I don't care how much higher oil goes this is a good time to take profits. I remember when XLE was below $30 lol.

[fenders53]

(02-02-2022, 09:09 AM)EricL Wrote: I thought this summed up the situation with oil pretty well.

Quote:There isn’t enough oil at prices that don’t blow up the economy to fund the level of GDP growth needed so that the debt doesn’t blow up the economy but if prices rise enough to get enough oil without blowing up the economy it will blow up the debt.

The Fed is in a pickle.

Have to raise rates to kill inflation, but can't raise rates because of $30 trillion in US debt and worries of blowing up the house of cards. GDP can't grow without oil, but the higher price of oil needed to grow production to meet demand will also cause inflation and kill the economy.

Food prices are about the explode too as high energy prices are causing fertilizer shortages which will have an impact on grain production this year.

It's going to be an interesting year...

That is EXACTLY how I see it. Over time some supply will hit the market but I don't think it's enough for this summer.  $85 oil isn't going to stifle the economy, but even though I own oil stocks I am not gong to wish for $125+ oil.  That's foolish unless your entire port is in oil.  And if your entire port is in oil you are still foolish soon enough.