June 16, 2025
(THE ENERGY SECTOR HAS EMERGED FROM THE QUIET CORNER)
June 16, 2025
Hello everyone
WEEK AHEAD CALENDAR
Monday, June 16
8:30 a.m. Empire State Index (June)
Bond market: Auction 20-year bond
11:00 p.m. Japan Rate Decision
Previous: 0.5%
Forecast: 0.5%
Earnings: Lennar
Tuesday, June 17
8:30 a.m. Export Price Index (May)
8:30 a.m. Import Price Index (May)
8:30 a.m. Retail Sales (May)
Previous: 0.1%
Forecast: -0.5%
8:30 a.m. Capacity Utilization (May)
9:15 a.m. Industrial Production (May)
9:15 a.m. Manufacturing Production (May)
10:00 a.m. Business Inventories (April)
10:00 a.m. NAHB Housing Market Index (June)
Bond market: Auction 5-year TIPS
Earnings: Jabil
Wednesday, June 18
8:30 a.m. Building Permits preliminary (May)
8:30 a.m. Continuing Jobless Claims (06/07)
8:30 a.m. Housing Starts (May)
8:30 a.m. Initial Claims (06/14)
2:00 p.m. FOMC Decision
Previous: 4.5%
Forecast: 4.5%
2:00 p.m. Fed Funds Target Upper Bound
Thursday, June 19
7:00 a.m. UK Rate Decision
Previous: 4.25%
Forecast: 4.25%
Markets closed for Juneteenth National Independence Day
Friday, June 20
2:00 a.m. UK Retail Sales
Previous: 1.2%
Forecast: -0.5%
8:30 a.m. Philadelphia Fed Index (June)
10:00 a.m. Leading indicators (May)
Earnings: Darden Restaurants, CarMax, Kroger
A looming supply crisis could send energy stocks jumping strongly to the upside.
Around a month ago, I wrote about what was sitting in the “quiet corner”. It was energy.
Since that time, energy names have been bouncing strongly, oil is breaking to the upside and as technical analyst, David Bird suggests, the macro setup suggests this may only be the beginning.
We are seeing a shuffling of the deck chairs, with smart money rotating into the sector that feeds tech and AI: energy.
Let’s not forget that the U.S. Strategic Petroleum Reserve (SPR) is basically America’s emergency oil reserve. The oil crisis of the 1970s saw the creation of this reserve to ensure the country had a back-up fuel in case of supply disruptions.
Over the past couple of years, the U.S. government has released more than 200 million barrels from this reserve to help bring down inflation and lower fuel prices, and consequently, this has left the reserve at its lowest level since the early 1980s. There is no solid plan to refill it soon either.
The macro background behind the U. S’s oil reserves carries many risks. We have the Middle East conflict, and the war in Ukraine, and oil production limits in countries like Venezuela and those in OPEC. Supply is tight, demand is rising, and our safety buffer is dwindling.
Interestingly, Bird, among others, points out that it was the Biden administration that authorised the drawdown, and Trump’s “drill, baby, drill” is a direct response to this self-imposed energy vulnerability.
The AI boom will be an energy vampire. The International Energy Agency (IEA) is drawing attention to the fact that electricity demand from AI and crypto mining could increase up to 10x by 2030.
If oil can now stay above $65 – and confirm buyers have taken control – this move could mark a significant turning point in the overall macro trend.
For ways to get involved in this unfolding narrative, Bird and other analysts suggest the following –
For Australian investors:
For Growth + Dividends:
Woodside Energy (WDS)
Australia’s largest independent oil and gas producer, with a strong cash flow and a strong history of consistent dividend payments.
For Stability and LNG Leverage:
Santos (STO)
The company has large-scale LNG operations across the Asia-Pacific region and shows consistent capital returns, as well as clear project pipelines. There is also potential M&A activity that could see the stock re-rated.
For Pure Growth
Beach Energy (BPT)
This mid-cap company has exposure to Australian and New Zealand gas and is gaining attention during this market rotation.
For a Leveraged Oil Play:
Betashares Crude Oil ETF (OOO)
This ETF tracks the price of crude oil futures – it is not a long-term hold and is best used for short to medium-term momentum plays.
For U.S. investors
United States Oil Fund ETF(USO)
This ETF tracks the price of light, sweet crude oil. Only to be used as a short-term play.
Occidental Petroleum (OXY)
This company is focused on exploration and production of oil and gas with operations in the U.S., Latin America and the Middle East. Dividend yield = 2.14%
Exxon Mobile (XOM)
This company is involved in the exploration, production, refining and distribution of oil and gas. It produces 3% of the world’s oil and 2% of the world’s energy. (XOM) has been operating for more than 135 years and is the seventh largest company by revenue in the U.S. and the 13th largest in the world. It has an attractive dividend – 4.3% over the last 12 months – and is undervalued.
Cameco Corp. (CCJ)
Cameco is the world’s largest publicly traded uranium company. Highest price targets from analysts = $106, and the lowest = $86, so more upside is possible this year.
Energy Select Sector SPDR Fund (XLE) ETF
This ETF includes companies that primarily develop and produce crude oil and natural gas and is an effective representation of the energy sector of the S&P500 index. A good buy when a sector shift happens and we see oil strength.
On the 10/10/24 I suggested to all Jacquie’s Post subscribers to scale in or add weight to one or more of these utility and energy stocks.
The Jacquie’s Post portfolio holds the following energy stocks:
Energy is no longer in the quiet corner. The narrative is shifting. Assess your position in relation to this regime change.
MARKET UPDATE
S&P500
The index could mark time here after its recent surge since April. This could be a top for a month or so. We may see a sideways/rangebound market or a sell off to 1st support level. Interestingly, the index has bounced strongly since falling on Friday after Israel sent missiles into Iran.
Resistance = 6030/45 and 6140/55
Support = 5900/15 and 5795/10
GOLD
Gold is still ranging – likely a part of a larger topping story. We would need to see a very strong breakout above key resistance ($3465/75) to put this topping pattern on hold.
Support = $3325/30/$3205/15
BITCOIN
Bitcoin has stalled since reaching the new high of $112k. There is scope now for more choppy/topping pattern behaviour, before a larger downside is seen.
Resistance: 106.5/107.0k/110.1/110.6k and 112/113k area.
Support: 102.7/103.2k, 100.0/100.4k and 97.5/98.0k. 95.0k/90.0k also possible.
HISTORY CORNER
On June 16
QI CORNER
Syz Private Banking
Syz Private Banking
SOMETHING TO THINK ABOUT
Cheers
Jacquie
