Yesterday, we talked about the buying opportunity in oil and oil and gas stocks.
Today, oil was one of the biggest movers in global markets—up 4.5%, back above $70 a barrel.
And energy stocks were the best performers on the day in the S&P 500, up 3.5% as a sector.
This aligns with the big outperformance of small-cap value over the past two days.
As we’ve discussed here in my notes for the better part of last year, we should expect small-caps and value to outperform large-caps and growth stocks coming out of recession, and moreover, persistently outperform large-caps over the next ten years.
Indeed, that has been the case. From the fourth quarter of last year through the first quarter of this year, small-cap value outperformed large-cap growth by the widest margin since World War II.
Coming out of recession, small-caps tend to follow the path of interest rates (climbing rates, suggests more optimistic outlook). With that, as interest rates (the 10-year yield) rose from...read more...