Jonathan Golub notes that energy company earnings are expected to double as oil prices rise due to Iran risks.
Jonathan Golub, a strategist at Seaport Securities, reports that energy company earnings are expected to double as crude oil prices rise. This growth is driven largely by the rising price of oil, which directly impacts major companies such as ExxonMobil, Chevron, and ConocoPhillips. While energy stocks represent only 3% of the S&P 500, they generate 5% of its earnings. The market is currently navigating a volatile period influenced by escalating U.S.-Iran tensions. Recent Iranian military strikes on ships and a power plant in Kuwait have pushed benchmark crude contracts up roughly 12% over the past week. Additionally, Ukrainian drone strikes on Russian refineries are increasing the global availability of Russian oil while simultaneously spiking prices for refined products like diesel fuel. Despite these fluctuations, the overall stock market remains relatively cheap as earnings estimates continue to climb. Investors are closely monitoring whether these rising prices will lead to a sustained bull market or if the current shock will be enough to trigger a significant economic slowdown.