Energy Sector has an earnings weighting basically *twice* that of its market cap weighting

Energy Sector Market Share:This chart is fascinating. As of the latest data, the Energy Sector has an earnings weighting basically *twice* that of its market cap weighting.

This is what happens when no one wants to buy energy stocks anymore.

I could probably leave it there as the chart itself speaks volumes, but a few points to ponder…

First, the disconnect probably says as much about possible upside for energy stocks (blue line goes up) due to ESG energy skepticism, as it does about the prospect thatfalling energy pricesin H2 of 2022 brings the black line back down.

Indeed, there are a few examples where the black line did most of the heavy lifting in closing previous sharp disconnects.

But as with many things in macro and markets, the trend is your friend. If this is more about the emergence or shifting into a new upward trend in earnings share, then we are definitely going to want to pay closer attention to energy stocks.

Sure, eventually fusion and other breakthroughs are going to make fossil fuels a thing of the past, but for now we still have tokeep the wheels turningone way or another — and we shouldn’t count out the traditional energy sector just yet (whether we like it or not).

https://chartstorm.substack.com/p/weekly-s-and-p500-chartstorm-22-january