BofA Analyzes Asset Performance Post-Geopolitical Events
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 16 hours ago
0mins
Source: CNBC
- Oil Price Surge: Crude oil prices typically rally after geopolitical events, with data showing a median increase of over 18% three months post-event since 1939, indicating strong market reactions that could influence investor asset allocation strategies.
- Gold's Safe-Haven Appeal: Gold, traditionally viewed as a safe-haven asset, has seen a median gain of about 6% in the three months following the onset of a crisis, reflecting increased demand for secure investments despite heightened volatility attracting retail investors.
- Stock Market Stagnation: In contrast to oil and gold, U.S. stocks have added less than 5% during the same timeframe, indicating a relatively muted response from the stock market amid geopolitical tensions, which may affect investor confidence in equities.
- Market Reaction Patterns: A Barclays report highlights that the S&P 500 tends to experience modest gains the day before and on the day of significant geopolitical events, suggesting that the market anticipates such incidents, yet overall changes remain minimal, reflecting a cautious investor sentiment.
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Analyst Views on XOM
Wall Street analysts forecast XOM stock price to fall
19 Analyst Rating
12 Buy
7 Hold
0 Sell
Moderate Buy
Current: 150.970
Low
114.00
Averages
132.17
High
158.00
Current: 150.970
Low
114.00
Averages
132.17
High
158.00
About XOM
Exxon Mobil Corporation is an energy provider and chemical manufacturer. The Company’s principal business involves exploration for, and production of, crude oil and natural gas; the manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals and a wide variety of specialty products; and pursuit of lower-emission and other new business opportunities, including carbon capture and storage, hydrogen, lower-emission fuels, Proxxima systems, carbon materials, and lithium. Its Upstream segment explores for and produces crude oil and natural gas. The Energy Products, Chemical Products, and Specialty Products segments manufacture and sell petroleum products and petrochemicals. Energy Products segment includes fuels, aromatics, and catalysts and licensing. Chemical Products segment consists of olefins, polyolefins, and intermediates. Specialty Products segment includes finished lubricants, basestocks and waxes, synthetics, and elastomers and resins.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Oil Price Surge: Crude oil prices typically rally after geopolitical events, with data showing a median increase of over 18% three months post-event since 1939, indicating strong market reactions that could influence investor asset allocation strategies.
- Gold's Safe-Haven Appeal: Gold, traditionally viewed as a safe-haven asset, has seen a median gain of about 6% in the three months following the onset of a crisis, reflecting increased demand for secure investments despite heightened volatility attracting retail investors.
- Stock Market Stagnation: In contrast to oil and gold, U.S. stocks have added less than 5% during the same timeframe, indicating a relatively muted response from the stock market amid geopolitical tensions, which may affect investor confidence in equities.
- Market Reaction Patterns: A Barclays report highlights that the S&P 500 tends to experience modest gains the day before and on the day of significant geopolitical events, suggesting that the market anticipates such incidents, yet overall changes remain minimal, reflecting a cautious investor sentiment.
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- Passive Income Potential: A $3,000 investment in Chevron at the current price of around $185 allows for the purchase of 16 shares, yielding an expected $113.92 in dividends in the first year, with a cumulative total of $617.03 over five years, significantly outperforming other peers.
- Strong Cash Flow Support: Chevron generated $16.6 billion in free cash flow last year, achieving industry-leading growth despite falling oil prices, and expects a $12.5 billion increase in free cash flow this year, ensuring the company can sustain and grow its dividends.
- Future Growth Expectations: The company anticipates its free cash flow will grow at a compound annual growth rate of over 10% through 2030, driven by expansion projects and the Hess acquisition, providing ample funding for future dividend increases.
See More
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- Dividend Growth History: ExxonMobil (XOM) has increased its dividend for 43 consecutive years, with a current yield of 2.7%, meaning a $10,000 investment yields $273 annually, showcasing its stable cash flow and attractiveness to investors.
- Efficient Business Model: ExxonMobil boasts an integrated business model in the oil and gas sector, with advantaged assets expected to comprise 65% of its upstream production by 2030, enhancing its competitive edge in the market.
- Technology-Driven Production Efficiency: The company employs cube development in the Permian Basin, with plans for 50% of its wells to utilize lightweight proppants by 2026, significantly improving drilling efficiency and resource recovery compared to competitors.
- Strong Project Execution Capability: ExxonMobil's centralized global projects organization executes three times as many mega-projects as its nearest competitor, achieving $15.1 billion in cumulative structural cost savings since 2019, ensuring profitability amid market fluctuations.
See More
BofA Analyzes Asset Performance Post-Geopolitical Events
- Oil Price Surge: Crude oil prices typically rally after geopolitical events, with data showing a median increase of over 18% three months post-event since 1939, indicating strong market reactions that could influence investor asset allocation strategies.
- Gold's Safe-Haven Appeal: Gold, traditionally viewed as a safe-haven asset, has seen a median gain of about 6% in the three months following the onset of a crisis, reflecting increased demand for secure investments despite heightened volatility attracting retail investors.
- Stock Market Stagnation: In contrast to oil and gold, U.S. stocks have added less than 5% during the same timeframe, indicating a relatively muted response from the stock market amid geopolitical tensions, which may affect investor confidence in equities.
- Market Reaction Patterns: A Barclays report highlights that the S&P 500 tends to experience modest gains the day before and on the day of significant geopolitical events, suggesting that the market anticipates such incidents, yet overall changes remain minimal, reflecting a cautious investor sentiment.
See More
GE Achieves New Record, Yet Goes Unnoticed.
- Edison's Legacy: Thomas Edison would be proud of the achievements of the company he co-founded.
- Record Value: The company has reached a new record value after a significant period of growth.
See More
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- Healthcare Sector Struggles: As of midday Friday, healthcare stocks are underperforming, with Insulet Corp (PODD) and Agilent Technologies, Inc. (A) down 3.1% and 2.8%, respectively, indicating a weak trend that may affect investor confidence in the sector.
- ETF Performance Insight: The Health Care Select Sector SPDR ETF (XLV), which tracks the healthcare sector, is down 0.3% on the day but up 1.28% year-to-date, highlighting a contradiction between short-term volatility and long-term growth that could influence investor asset allocation decisions.
- Energy Sector Also Weak: The energy sector is similarly not showing significant gains, with Exxon Mobil Corp (XOM) and Coterra Energy Inc (CTRA) down 2.5% and 2.0%, respectively, reflecting market caution towards energy stocks that may impact future investment inflows.
- ETF Comparison: The Energy Select Sector SPDR ETF (XLE), closely tracking energy stocks, is down 0.6% on the day but up 22.65% year-to-date, indicating that despite short-term fluctuations, the long-term trend remains positive, potentially attracting the attention of long-term investors.
See More
The Major Shift Has Begun—and Perhaps Concluded. What Are the Next Steps?
Market Dynamics: The article questions whether the current stock market trends represent a genuine rotation or are simply erratic fluctuations akin to a carnival ride.
Personal Reflection: The author expresses regret over their investment choices, likening the experience to regretting a poor food choice at a fair.
See More
