Bloomberg Intelligence's 'Equity Market Minute' 2/19/2020

The video discusses the current state of energy stocks, highlighting their low valuation relative to the S&P 500. Despite speculation that it might be a good time to invest, the analysis shows that both oil prices and relative valuations are in the middle of their long-term range, offering no clear investment signal. The Mullah Dowski effect is explained, noting that energy stocks peak when valuations are low. A comparison of price to book ratios across sectors reveals that energy stocks are relatively expensive compared to their return on equity.

What is the current state of energy stocks compared to the S&P 500?

• Energy stocks are at new lows relative to the S&P 500.

• Energy stocks are outperforming the S&P 500.

• Energy stocks are at new highs relative to the S&P 500.

• Energy stocks are performing equally to the S&P 500.

What does the Mullah Dowski effect describe?

• The impact of global events on energy stock prices.

• The correlation between energy stocks and the S&P 500.

• The tendency of energy stocks to peak when valuation ratios are low.

• The relationship between oil prices and stock performance.

How are oil prices and energy sector valuations currently positioned?

• Oil prices are high, but valuations are low.

• Both are at the high end of their long-term range.

• Both are at the low end of their long-term range.

• Both are in the middle of their long-term range.

What does the price-to-book ratio indicate about energy stocks?

• They have the highest return on equity.

• They are fairly priced compared to other sectors.

• They are more expensive than most sectors.

• They are cheaper than most sectors.

Which sectors are considered technically expensive according to the analysis?

• Only the energy sector.

• All sectors in the S&P 500.

• Sectors below the line in the price-to-book comparison.

• Sectors above the line in the price-to-book comparison.