As the economy opens up again and people are allowed to travel safely, one sector that stands to benefit the most this summer is Energy. And while traveling to Fiji might not be in the cards just yet, it is possible for investors to begin to analyze the best energy stocks to buy for the summer of 2021.
But this might not be as simple as it was in 2019 or even 2020…
Have you heard the news? This stock market has been taken hostage by the Federal Reserve.
The market is reacting in a counterintuitive way right now because of the stage the Fed has set — it’s effectively backed itself into a corner.
Putting Joy of the Trade’s Jeff Zananiri and I into the shoes of the average investor, this is bad news for us.
Let’s say the next numbers dump of Fed data is great and beats expectations. That means the Fed will begin to slow down the sizzle of pandemic-relief funds and stimulus that’s been flowing into the pockets of many Americans.
However, the market will interpret this as bad since interest rates will rise and the economy could begin to overheat. So as the average investor, you’re dancing a fine line…
You can either have the economy do poorly so easy money keeps flowing with low interest rates. Or you can have an overheated economy with high rates.
You see, the average investor is also being held hostage by the Fed.
At this point of the game — and where the market stands with the Fed — inflation trades are going to stick around for the long haul.
For those of you who are confused, an inflation trade is a trading strategy that allows investors to profit from rising price levels caused by inflation or the expectation of inflation.
And considering the time of year, Jeff is focusing on the Energy sector.
Recently, he noticed that the Energy Select Sector SPDR Fund (NYSEArca: XLE) is making new highs while oil’s chart is also breaking out.
And we can’t forget that we’re at the beginning of the summer road trip season. He doesn’t know about you, but Jeff takes a mandatory trip to see all of his family in the north every summer.
Being the proactive business man that he is, he’s already done the calculations for gas… and sheeeesh. It’s going to cost an arm and a leg to make the drive — double the price of his 2020 road trip.
What do you think is going to happen to the price of gas by the Fourth of July?
And do you know what the market does when it finds a painful point in the economy? It makes it worse.
He has a hunch that we’re going to see shocking gas prices this summer, causing unprecedented levels of oil on the market, leaving investors wondering where it all went wrong.
Things are going wrong right now: The Biden administration announced it is suspending oil and gas leases in Alaska’s Arctic National Wildlife Refuge.
This is bearish for America, but quite bullish for oil. And to us, the people, that means we’re going to pay for it at the pump.
But luckily for investors, this also means these three energy stocks will make massive moves this summer.
Check out our short video below to learn more about the three hottest energy stocks to buy during the summer of 2021, and be sure to share your thoughts in the comments section below.
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