ExxonMobil Q3 FY12/2024 Earnings Review

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Wen Breakout?

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

As everyone knows, inflation is coming back, because tariffs. And if inflation comes back, we can kiss goodbye to rate cuts. And if no rate cuts, then high beta stocks are going to get a kicking. Which "should" (ha!) cause rotation into more boring sectors like energy, which generally have some price-setting power so can benefit from an inflationary environment.

In the alternative, inflation is in fact quelled, the Fed continues to hack away at the funds rate, but demand for energy moons because AI. See for instance this note from Bloomberg recently.

So I can think of at least two high-level reasons why capital ought to rotate into the energy sector. One commensurate with a bear market in general equities, and one with a bull market.

So far though, the sector has yet to really respond. Here's $XLE, the energy sector ETF, which continues to just trend sideways at high volume in a rangebound manner. Now, oftentimes that is what institutional accumulation looks like, so I continue to be patient here. (Remember $IWM between $160-200/share for 2+ yrs before it broke out?).

You can open a full page version of this chart, here.

For the patient investor, let's check in on XOM's Q3.

Financial Summary

Here’s the headlines.

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