XLE - Energy Select Sector SPDR (Energy)

Energy tends to beat inflation and benefits from the Strait of Hormuz disruption and higher oil prices

Oil closed below a wedge pattern on Friday, potentially signaling a bigger breakdown. Geopolitical developments over the weekend could influence direction.

Energy is essential to powering AI data centers. Holds Chevron, Exxon, ConocoPhillips. Geopolitical advantage from US involvement in Venezuela giving these companies first access to resources.

The host allocates 20% to XLE, the energy sector ETF. He argues that energy companies like Chevron, Exxon, and Kico Phillips are essential to powering AI infrastructure. He also cites geopolitical factors, specifically America's involvement in Venezuela, which would give these companies first access to resources.

The host says he is currently looking at energy stocks as an undervalued pocket of the market, mentioning he discussed them in his previous video.

The host discusses oil above $100, record inventory depletion, SPR at critically low levels, and Strait of Hormuz disruptions. While he doesn't explicitly recommend energy stocks, he presents a strongly bullish case for oil prices and warns of structural inflation from energy costs feeding into food and fertilizer.

Energy is included in the 'boring' portfolio recommendation alongside staples and utilities as recession-resistant, dividend-paying sectors.

Oil is in deep backwardation with front-month trading at steep premium to 6-month futures, signaling a physical supply crisis. The presenter previously identified oil as the breakout trade to watch and it has played out. Oil staying above $100 is a key part of the bearish thesis for equities.

The host explicitly states he is 'so bullish on energy, metals, and commodities' as the most likely path forward. Energy is specifically called out as an inflation-sensitive sector that outperforms during financial repression and inflation monetization scenarios.

Energy infrastructure (pipelines, storage terminals, refineries) identified as longer-term winners during conflicts involving oil disruptions. Felix mentions his fund has been investing in oil service companies for months before the war started.