Latest News

BofA warns hot inflation might run rampant for another 10 years — here’s the 1 shockproof sector that could preserve your wealth under that worst-case scenario

18237500 - businessman hand pointing to investment as concept

S&P 500



Dow 30






Russell 2000



Crude Oil












10-Yr Bond












CMC Crypto 200



FTSE 100



Nikkei 225



BofA warns hot inflation might run rampant for another 10 years — here’s the 1 shockproof sector that could preserve your wealth under that worst-case scenario

Despite the U.S. Federal Reserve’s aggressive rate hikes — including four consecutive hikes of 75 basis points — inflation is still running hot.

Consumer prices in the U.S. climbed 0.4% in October and were up 7.7% from a year ago.

High inflation not only erodes the purchasing power of money but also means the Fed will likely remain hawkish. And that does not bode well for the stock market.

Will inflation go back to normal anytime soon?

Bank of America doesn’t believe so.

“Historically, it takes an average of 10 years for a developed economy to return to 2% inflation [once] the 5% threshold is breached,” the bank says in a recent note.

Don’t miss

‘Hold onto your money’: Jeff Bezos issued a financial warning, says you might want to rethink buying a ‘new automobile, refrigerator, or whatever’ — here are 3 better recession-proof buys

You could be the landlord of Walmart, Whole Foods and Kroger (and collect fat grocery store-anchored income on a quarterly basis)

Mitt Romney says a billionaire tax will trigger heavy demand for this physical asset — get in now before the super-rich swarm

BofA highlights sticky wage inflation, population aging, and underinvestment in energy as reasons why price levels would remain elevated. According to BofA’s projection, oil prices would average $100 per barrel next year.

If BofA is right, energy stocks might see even better days ahead. Here’s a look at two energy names that the bank finds particularly attractive.

Exxon Mobil (XOM)

Exxon Mobil is an oil supermajor commanding over $400 billion market cap.

While the broad market is deep in the red in 2022, Exxon shares have climbed 73% year to date.

It’s not hard to see why investors like the stock: the oil-producing giant gushes profits and cash flow in this commodity price environment.

Stay on top of the markets: Don’t miss the latest news and a steady flow of actionable ideas from Wall Street’s top firms. Sign up now for the MoneyWise Investing newsletter for free.

In the first nine months of 2022, Exxon earned $43.0 billion in profits, a huge increase from the $14.2 billion in the year-ago period. Free cash flow totaled $49.8 billion for the first nine months, compared to $22.9 billion in the same period last year.

Solid financials allow the company to return cash to investors. Exxon pays quarterly dividends of 91 cents per share, translating to an annual yield of 3.3%.

Bank of America has a ‘buy’ rating on Exxon and a price target of $123. Since shares trade at around $110 right now, the price target implies a potential upside of 12%.

ConocoPhillips (COP)

ConocoPhillips is another big player in the energy sector. It had proved reserves of 6.1 billion barrels of oil equivalent and produced 1,567 thousand barrels of oil equivalent per day in 2021.

Just like Exxon, ConocoPhillips is firing on all cylinders thanks to strong energy prices.

In Q3 of 2022, the company’s average realized price was $83.07 per barrel of oil equivalent — a 46% increase from the $56.92 per barrel of oil equivalent in Q3 of 2021.

ConocoPhillips’ adjusted earnings came in at $4.6 billion for Q3, a huge increase from the $2.4 billion it earned in the same period last year.

In Q3, the company returned $4.3 billion of cash to shareholders, including $1.5 billion in dividends and $2.8 billion through share buybacks. ConocoPhillips also raised its quarterly dividend by 11% to 51 cents per share.

ConocoPhillips shares have already surged 66% year to date and Bank of America sees further upside on the horizon. The bank has a ‘buy’ rating on the company and a price target of $140 — roughly 14% above where the stock sits today.

What to read next

Open enrollment ends December 7 — use this hack to find cheaper health insurance in just one minute

Rich young Americans have lost confidence in the stock market — and are betting on these assets instead. Get in now for strong long-term tailwinds

Here are 3 money moves to boost your bank account right now

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.


Dow Jones Futures: Inflation Report Due After S&P 500 Surges Above 200-Day On Fed Chief Powell

Previous article

This trader sees a 43% drop for the S&P 500 and says to take shelter in these ETFs instead.

Next article

You may also like


Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News