The Traderszone Network

Published in TZ Latest News 12 May, 2017 by The TZ Newswire Staff

Goldman Spots An Odd Divergence In Energy

In late 2015 and early 2016, as oil crashed, a curious divergence emerged: as crude was dropping, junk bonds crashed with a far greater beta to the drop in the underlying commodity than equities, which remained persistently sticky, stubbornly refusing to drop to a “fair value” implied by oil. The same phenomenon was even more obvious on the way up, as once oil had found a “bottom” energy stocks surged, at times approaching record forward P/E multiples.

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