--- title: "“Long energy + Short consumer discretionary” – The pairing trade combination that is currently popular on Wall Street" description: "The dominance of technology stocks is shaken, while energy stocks perform strongly due to the rebound in oil prices and the huge energy consumption demand from AI development; analysts believe that sh" type: "news" locale: "en" url: "https://longbridge.com/en/news/276087906.md" published_at: "2026-02-17T02:06:50.000Z" --- # “Long energy + Short consumer discretionary” – The pairing trade combination that is currently popular on Wall Street > The dominance of technology stocks is shaken, while energy stocks perform strongly due to the rebound in oil prices and the huge energy consumption demand from AI development; analysts believe that shorting consumer discretionary is due to weak retail data and poor corporate earnings expectations, raising concerns about consumer health, and compared to directly shorting disruptive technology stocks, the risks of shorting this sector are more controllable A new sector pair trading strategy is emerging on Wall Street, with the "long energy + short consumer discretionary" combination replacing the dominance of technology stocks over the years, becoming one of the most attractive sector trades currently. Bloomberg macro strategist Simon White recently wrote that, driven by a rebound in oil prices, **U.S. energy stocks have risen over 20% this year, outperforming all other sectors including technology stocks**. Meanwhile, **investors are shorting the consumer discretionary sector, which includes non-AI core companies like Amazon and Tesla, as well as traditional retail stocks.** Weak retail sales data in December raised concerns about consumer health, and after toy manufacturer Mattel issued weak earnings forecasts, its stock price recorded the largest single-day drop since 1999, further dampening market sentiment. Data shows that **the short interest ratio for consumer discretionary stocks has increased more than that of technology stocks, while the short interest ratio for energy stocks has dropped to near its lowest level in nearly a year**. Analysts believe this trend reflects a reassessment by investors of the prospects for different sectors and a shift in preference for physical asset allocation in an inflationary environment. ## The Dominance of Technology Stocks is Shaken, Energy Stocks Strongly Rebound For a long time, technology stocks have outperformed other major sectors in the U.S., but this dominance is no longer secure in the minds of investors. Artificial intelligence (AI) companies are investing heavily in infrastructure, with investment levels comparable to the GDP of small to medium-sized countries. This high-risk gamble has led to a strict examination of the business models and profit margins of software-as-a-service (SaaS) companies, as AI is turning code production into a nearly costless commodity. **In contrast, while the energy sector was previously hindered by profit declines due to low oil prices and reduced allocations from large investors due to ESG (Environmental, Social, and Governance) restrictions, the situation has now reversed.** While AI aims to reduce intelligence costs, its hard constraint is the processor's greedy demand for energy. This year, driven by a rebound in oil prices, U.S. energy stocks have risen over 20%, not only outperforming the market but also directly surpassing the technology sector. ## Shorting Targets Shift: From Technology to Consumer Discretionary Despite the disruption risks and massive spending pressures facing the technology sector, directly shorting tech stocks is still seen as a "brave" trade, as the industry is filled with unknown rapid disruption capabilities. Therefore, investors have not heavily shorted AI developers but have instead focused their shorting targets on consumer discretionary stocks. This category includes not only non-pure AI developers like Amazon and Tesla but also standard retail stocks. Market sentiment has been hit by specific data: > December retail sales performance was weak, raising concerns about consumer health; Mattel, due to its weak earnings forecast, saw its stock price record the largest single-day drop since 1999, further undermining market confidence. Data shows that the current short ratio for consumer discretionary stocks has increased more than that of technology stocks, while the short ratios for energy stocks and consumer staples have dropped to their lowest levels in at least a year Analysis indicates that **as long as concerns about consumer health persist, technology companies will continue to damage the health of their balance sheets with large-scale investments, and the demand for physical asset allocation will continue to increase in an inflationary environment where the government maintains large fiscal deficits**, there is no reason for the emerging sector trends this year to change direction quickly ### Related Stocks - [IEZ.US - iShares US Oil Equip & Svcs](https://longbridge.com/en/quote/IEZ.US.md) - [CRAK.US - VanEck Oil Refiners ETF](https://longbridge.com/en/quote/CRAK.US.md) - [VDE.US - VG Energy](https://longbridge.com/en/quote/VDE.US.md) - [XLE.US - SPDR Energy Select](https://longbridge.com/en/quote/XLE.US.md) - [OIH.US - VanEck Oil Services ETF](https://longbridge.com/en/quote/OIH.US.md) - [XES.US - SPDR O&G Equip](https://longbridge.com/en/quote/XES.US.md) - [IXC.US - ISHRS S&P Glb Engy](https://longbridge.com/en/quote/IXC.US.md) - [XOP.US - SPDR O&G Ex & Prd](https://longbridge.com/en/quote/XOP.US.md) - [IEO.US - iShares US Oil & Gas Expl & Prod](https://longbridge.com/en/quote/IEO.US.md) - [PXJ.US - Invesco Oil & Gas Services ETF](https://longbridge.com/en/quote/PXJ.US.md) ## Related News & Research | Title | Description | URL | |-------|-------------|-----| | 花旗銀行指出，地緣政治因素將在短期內支撐油價，而和平協議可能會導致價格下降 | 花旗銀行預測，由於地緣政治緊張局勢，特別是涉及俄羅斯和伊朗，油價在短期內可能會保持支撐。然而，潛在的和平協議可能導致今年晚些時候油價下降，布倫特原油預計將跌至每桶 60-62 美元。該銀行指出，近期的制裁和供應中斷促成了價格上漲，並預計 O | [Link](https://longbridge.com/en/news/276077208.md) | | Expand Energy 的盈利前景展望 | Expand Energy（納斯達克代碼：EXE）定於 2026 年 2 月 17 日公佈季度財報，分析師預測每股收益（EPS）為 1.88 美元。投資者對積極的指引抱有希望，尤其是在之前的每股收益超預期後股價卻下跌的情況下。目前，股價為 | [Link](https://longbridge.com/en/news/276067452.md) | | 由於交易員將注意力轉向關鍵的美伊談判，布倫特原油價格小幅下跌 | 布倫特原油價格下跌 0.47%，至每桶 68.33 美元，交易者關注美國與伊朗的核談判，同時伊朗在霍爾木茲海峽進行海軍演習。美國西德克薩斯中質原油上漲 0.99%，至 63.51 美元。市場情緒仍然波動，受到地緣政治發展的影響，而非供需基本 | [Link](https://longbridge.com/en/news/276093626.md) | | USA Compression Partners LP 第四季度來自經營活動的淨現金增加 7%，達到 1.395 億美元 | USA Compression Partners LP 報告稱，2025 年第四季度經營活動產生的淨現金增加了 7%，總計為 1.395 億美元。該公司實現了創紀錄的收入 2.525 億美元，淨收入為 2780 萬美元。調整後的 EBITD | [Link](https://longbridge.com/en/news/276119446.md) | | 花旗銀行重申其對 BP p.l.c.（BP）的買入評級 | 花旗分析師阿拉斯泰爾·賽姆（Alastair Syme）重申了對 BP p.l.c.的買入評級，目標價為 5.25 英鎊。賽姆是一位五星級分析師，成功率為 68.14%，專注於能源領域。此外，BP 還獲得了 DZ BANK AG 的買入評級 | [Link](https://longbridge.com/en/news/276058830.md) | --- > **Disclaimer**: This article is for reference only and does not constitute any investment advice.