Taps Coogan – January 24th, 2022

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The following chart, from Bank of America via ISABELNET, shows how global energy stocks have underperformed consumer discretionary stocks since the Global Financial Crisis.

As the chart below highlights, a return to the pre-Covid growth trend in retail sales would amount to a roughly $50 billion decline in sales. While such a decline would presumably be moderated by inflation – at least nominally, it represents a larger drop than the peak to trough decline in retail sales during the Global Financial Crisis (~$49 billion).

Speaking of inflation, energy was the best trade in the 1970s.

Speaking of energy, as Bloomberg recently noted:

“In the past year, though, prices for solar panels have surged more than 50%. Wind turbines are up 13%, and battery prices are rising for the first time ever.”

80% of the world’s solar panels are made in China, a country in which about 68% of total energy consumption comes from coal. 

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