Follow Mr. Market Into EnergyBy Joel Litman, chief investment officer, Altimetry
 Everyone celebrated "Vaccine Monday." Everyone except Wall Street, that is...
Biotechnology leaders Pfizer (PFE) and BioNTech (BNTX) shocked the world by unveiling their new, 90%-effective COVID-19 vaccine on November 9, 2020. It normally takes 10 to 15 years to produce an effective vaccine... Pfizer and BioNTech accomplished that feat in a matter of months. But as people around the world rejoiced, Wall Street faced a big problem... figuring out the market's next move. In any economic cycle, investors favor certain parts of the market and shun others. The start of the pandemic kicked off what we called the "At-Home Revolution"... Global travel had ground to a halt in early 2020. And travel stocks like Expedia (EXPE) fell more than 50% between January and April of that year. Meanwhile, investors put their cash toward companies best positioned to profit from the quarantine. Wall Street caught on. And it's ready to profit from another move that's playing out today... in a completely different corner of the market. During the pandemic, capital flowed away from travel and into areas geared toward the At-Home Revolution...Fitness-equipment provider Peloton Interactive (PTON), for example, soared more than 550% from March 2020 through October of that year. Video-conferencing leader Zoom Communications (ZM) jumped more than 400% in that period. This is an example of sector rotation. The At-Home Revolution trade lasted for about eight months. But everything changed on Vaccine Monday... Investors who had ditched travel stocks when the world shut down quickly reversed their stance when things started to open back up. Expedia jumped 25% on November 9, 2020... American Airlines (AAL) rose 15%... and Pfizer climbed 8%. Meanwhile, Peloton fell 20% and Zoom dropped 17%. These days, Zoom trades for around $91. That's a long way off from its $559 peak in October 2020. Since Vaccine Monday, the company's stock is down more than 80%. Zoom isn't a good buy today. But back in early 2020, it was one of the best investments you could have made. The key is knowing the right time to buy into stocks. And it all comes down to sector rotation...If you can pinpoint the sectors pulling in the most investment in the coming months, you can identify the best companies to buy in that space. We're seeing another powerful sector rotation today...
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It's no secret that AI is dominating the markets. New developments from companies like Anthropic and OpenAI are revolutionizing this technology. Complex code can be written in minutes... tedious tasks are now automated... and cutting-edge AI models are displaying humanlike reasoning. Despite these impressive capabilities, the AI industry is facing one significant bottleneck... power. AI models need data centers to run. And a single data center commands enough energy to power a small city. As we continue building more of these facilities, we'll need more energy to sustain them. This translates into more oil and gas production. Investors are starting to recognize this trend and rotate into energy...The State Street Energy Select Sector SPDR Fund (XLE) tracks some of the biggest names in energy. And it's up more than 30% in the past year... about double the S&P 500's performance. That's the same setup we saw in travel stocks once the COVID-19 vaccine came out... Money moved first. The individual winners came later. Today, Wall Street is preparing to cash into the energy sector. And I don't want you to miss the best opportunities in this space. I recently outlined an approach that could steer you toward some of the best-performing investments in the sector rotation we're about to experience. But you've got to prepare... History tells us that a big market move could unfold around August 12. Click here to find out which stocks are best positioned to hand you profits... and which could torpedo your portfolio. Regards, Joel Litman
July 30, 2026
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