Troubles in the energy and gold sector
During the ongoing earnings season, most energy companies continue to report big losses due to weak demand. For example, Suncor Energy (TSX:SU)(NYSE:SU) announced its results earlier this week. It reported a massive $302 million adjusted net loss in the third quarter compared to a $1.1 billion profit in the same quarter of 2019. Lower energy demand amid the pandemic — along with narrowing cracking margins — took a big toll on Suncor Energy’s bottom line in the last quarter.
Low energy demand is also taking a big toll on energy firms’ revenues. In Q3, Suncor Energy’s revenue fell by 35% to $6.5 billion — much worse than $9.9 billion in the third quarter of 2019.
At the same time, the recent drop in gold prices is putting pressure on gold stocks. With no hopes of immediate economic recovery, energy stocks might continue to face troubles in the coming quarters. A sell-off in these two sectors could also lead to a market crash in the coming months.
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