US GDP Up "2.4%", Will Exxon Mobil Rise Also?
“All good things must come to an end”, they say.
And it did for Dow Jones Industrial Average on Thu, 27 Jul 2023, because it did not manage a 14th day rally. Market started the day strong but lost steam along the way (see above).
By the time market closed for the day:
DJIA: -0.67% (-237.40 TO 35,252.72).
S&P 500: -0.64% (-29.34 to 4,537.41).
Nasdaq: -0.55% (-77.17 to 14,050.11).
Market’s Morning Rally Catalyst!
An increase in real GDP could be a sign that the US economy is doing well.
For Q2 2023, US’s real gross domestic product (GDP) increased at an annual rate of 2.4%.
This is an increased of +0.4%, compared to Q1 2023’s GDP of 2.0%.
Could this be the reason why in his press conference after FOMC interest hike announcement, Mr Powell declared that “Fed staff has dropped US recession forecast?” (see below) LOL!
Energy giant $Exxon Mobil(XOM)$ will be reporting its Q2 2023 earnings on Fri, 28 Jul morning.
Wall Street has forecasted at least -30% decline in sales.
And profits less -50% YoY; due to lower oil and natural gas prices in 2023.
At the time of writing, Exxon Mobil has been forecasted to start trading on a lower price (see below).
Exxon Mobil Earnings Forecast:
Estimates: Analysts expected Exxon earnings slipping -50% to $2.03 per share with revenue decreasing -30% to $81.8 billion.
Results: ExxonMobil reported profits falling -53% to $1.94 per share while sales decreased -28% to $82.91 Billion.
The main reason for massive dip in profit was primarily (a) the result of lower natural gas prices and (b) tightening refining margins.
Capital and Exploration expenditures totaled $12.5 Billion for H1 2023, within company's full-year guidance of $23 billion-$25 billion.
Exxon Mobil CEO - Darren Woods
Chief Executive Officer Darren Woods sounded an optimistic note in the earnings release.
He underlined - "The work we've been doing to improve our underlying profitability is reflected in our second-quarter results, which doubled from what we earned in a comparable industry commodity price environment just five years ago”.
Given that Energy companies and its stock prices are cyclical in nature should not deter any investors who are interested in (a) “good” companies and (b) with mid to long term investment horizon.
Examine Exxon Mobil’s past 1-year performance (see above).
Stock price has gained +11.39%.
It bottomed on 26 Sep 2022 at $83.58 per share.
It has recovered much of its “lost” grounds.
Exxon Mobil will not be a speculator’s stock to own.
Other Exxon Mobil Positive Notes:
(1) In its Q2 2023 earnings’ outlook, Exxon Mobil has reported that it has entered into a long-term agreement with steelmaker $Nucor(NUE)$ to (a) capture, (b) transport and (c) store up to 800,000 metric tons of carbon dioxide per year from Nucor's steel manufacturing site in Convent, Louisiana.
The project is expected to start up in 2026 and is subject to government permitting.
(2) ExxonMobil is purchasing $Denbury Inc.(DEN)$ for approx. $5 Billion.
It is a deal that Exxon touts as integral to carbon emission cutting efforts.
The deal will provide Exxon with the largest U.S. pipeline network, 1,300 miles, dedicated to transporting carbon dioxide.
Not to mention Denbury's 10 onshore carbon sequestration sites as central to the deal.
(3) Although oil & natural gas prices have retreated in 2023, US oil futures appear to have reached an inflection point.
US oil prices has been hovering around $80 per barrel for two sessions, after topping that price level on Thu, 27 Jul 2023, for the first time since mid-April.
The biggest wild card for prices is perhaps still China where demand has underwhelmed forecasts.
With the Chinese government recent pledged to step up stimulus support (see below), bolstering the oil demand outlook for the world's top crude importer.
Will Christmas come early this year for Exxon Mobil?
Do you think H2 2023 belongs to cyclical energy stocks?
Do you think ExxonMobil will be able to turn the table around by Q3 2023?
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Well, oil futures bulls went to work again. WTI from $79.61 at 1:05 ET to a new session high just now 2:25 ET at $80.69..... a new 14 week record. Brent trading at $84.48. This is getting really fun to watch.
We need some Tech P/E's in the Value sector. I think XOM needs a 400 to 800 P/E. I know I'm asking for a lot, but I won't be impatient if it doesn't happen tomorrow...I'll wait til the end of the week.. 🤠
I'd rather give up my XOM stock profit if I knew I could live in an America as defined by our Constitution and not the liberal manipulated joke you are making of it. Saudi just needs to extend the cuts into September. Go XOM!
Will u consider "Follow me" and get firsthand read of my daily new posts? Thanks!
i make $4400 a yr off XOM, but give it all away at the pump, insurance, food and travel inflation.
Have EIA and API oil drawdown reports come in fairly close over the last few weeks/months?
Oil, likely to continue the run on optimistic outlook for global economy.
XOM Volume 65 Day Moving Average = 15.9 million 🤠