STOCKS | Goldman Sachs Strategists Say European Stocks Can Withstand High Energy Prices

Goldman Sachs strategists said rising energy prices would hit the European economy more than the stock market. According to Sina Finance, a research team led by Guillaume Jaisson said earnings for the Stoxx Europe 600 have historically been positively correlated with energy prices. Their analysis of data since 1990 showed that every 10% increase in Brent crude prices was associated with a roughly 2.4 percentage point rise in European corporate earnings, with most of the benefit concentrated in commodity-related sectors. The strategists wrote in a research note that utilities, financials, and some chemical stocks could also benefit from higher inflation, stronger pricing power, and rising interest rates.