Markets regularly get ahead of themselves bringing to mind the old trading floor saying – “buy on rumour & sell the fact”. The chart below illustrates that the Australian Energy Sector roared higher in January before falling even as the oil price rallied, its actually failed to scale last months top even after the underlying commodity has rallied ~20%.
The COVID pandemic appears to be under control, the UK only registered 10,000 cases overnight compared to numerous days of well over 50,000 in January. Obviously there will be more inconvenient blips as we saw last week in Victoria but a return to some degree of normality should flow through in later 2021 / 22 although the exact form of that normality remains a fascinating point of discussion e.g. I cant imaging holidays in Europe / the US will be on the menu for at least 12-18 months’ time.
We touched on RHC earlier today, below MM has looked at 3 obvious “reopening” plays which have gone cold recently, as we pose the question is their time about to return and would they make a better vehicle than RHC for such exposure.
