Chevron Corp Q2 FY12/24 Earnings Review

Chevron Corp Q2 FY12/24 Earnings Review
Photo by Greg Willson / Unsplash

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More Big Oil

by Alex King, CEO, Cestrian Capital Research, Inc.

Background - Sector Rotation - Again!!

(Apologies if you read this part already in this week’s notes on Exxon Mobil or Occidental Petroleum, but it’s a core part of the reason I own $CVX personally, so worth repeating here).

Energy stocks are, I believe, under accumulation at present. I don't think a near-term breakout is on the cards; I don't think this is a momentum opportunity; but speaking personally I have positions in each of the energy stocks and ETFs that comprise the Energy Sector Model Portfolio in our Inner Circle service.

Why?

Because sector rotation.

Sector Rotation - Where Next For Big Money?
Time to follow the breadcrumbs once more.

At the present time, tech stocks are in the ascendant and if you want to stay ahead of the market, tech remains a compelling place to be. The rate cut cycle will likely help that. But just as sector X is moving up, you can bet that Big Money is quietly accumulating positions in sector Y which has yet to move up - so that when the news breaks and momentum investors everywhere pour into Sector Y, bigs have already loaded up.

Energy stocks I suspect are being accumulated because (1) they are out of fashion, having mooned in 2022 (2) geopolitics continues to get ugly and oil is a useful asset class to own at such a time and (3) inflation.

"Inflation?", you may say. "What inflation? There is no inflation - Chairman Powell just told us it was beaten!". Well, that 50bps cut just saw US government bonds sell off and oil move up. Bonds are saying that inflation is likely to rear its head once more, and oil is saying that if tech and bonds swoon, oil will likely hold up. You can see this play out daily in our Market On Open notes.

Chevron Corp ($CVX)

Read on for the financial detail, valuation, our stock chart and rating.