Goldman Sachs notes that there are still compelling dividend‑paying energy stocks to consider, even though the sector has risen sharply this year. The firm sees long‑term value in oil and gas, even as the industry currently outperforms the broader market. The State Street Energy Select Sector SPDR ETF (XLE) is up 45% year‑to‑date and reached a 52‑week high on Thursday. By contrast, the S&P 500 has risen about 13% so far this year. Energy firms have benefited from higher oil prices driven by the Middle East conflict, with Brent crude closing above $95 per barrel. “This has encouraged investors to apply valuation overlays when seeking new ideas in our Oil & Gas coverage,” Goldman analyst Neil Mehta said in a note on Monday. “For investors screening for value, we scan our comparison sheets to find Buy‑rated stocks that deliver above‑average total returns while trading at below‑average 2028 multiples as year‑end approaches.” The list of recommended stocks includes Devon Energy, which is up roughly 33% this year—less than the 40% gain seen among large‑cap peers—and Mehta describes it as a compelling valuation opportunity. “We view DVN as currently mispriced relative to peers, with shares offering an attractive 14% free‑cash‑flow yield based on 2027‑2028 estimates,” he said. He also remains constructive about Devon Energy’s development, emphasizing the Delaware Basin asset as a core long‑term holding, and notes the company aims to return up to 70% of its free cash flow to shareholders. Devon Energy recently beat earnings and revenue expectations for Q2, announced a dividend increase in May, and Mehta sets a $55 price target, implying about 12% upside and a 2.3% dividend yield. Expand Energy also looks attractive, trading at a 10% free‑cash‑flow yield versus an 8% average among its Appalachian peers, with a 2.3% dividend yield and a steady capital return program. Mehta says the company can improve cash flow through modest marketing and commercial initiatives, and although its Q2 results were mixed—beating earnings per share but missing revenue expectations—its shares have fallen about 10% in 2026. U.S. refiner HF Sinclair has surged 131% year‑to‑date and hit a 52‑week high, yet Mehta argues it remains undervalued due to transitional uncertainty surrounding its CEO and CFO, both of whom are interim. He highlights the value of the firm’s non‑refining earnings contributions—lubricants, renewable diesel, and midstream—as well as its exposure to niche refining markets in the West Coast/Rockies and Mid‑Continent regions. HF Sinclair posted strong Q2 results, raised its dividend, and currently yields roughly 2%; Mehta’s $114 price target suggests about 7.5% upside. ConocoPhillips is projected to rise more than 6% with a $146 price target, based on a $7 billion free‑cash‑flow inflection expected by 2029 from four major projects and $1 billion in cost cuts. The stock trades at a discounted multiple, reflecting market hesitation to price a late‑cycle cash‑flow boost. ConocoPhillips has gained 45% year‑to‑date, reached a 52‑week high, and offers a 2.5% dividend yield.

Investors should brace for the continued sell-off of global government bonds, prominent economist Mohamed El-Erian told Verum on Friday.

“I don’t see any appetite in the U.S. for immediate fiscal consolidation. So I suspect we will continue to see upward pressures on yields,” he told Verum’s Carolin Roth at the Ambrosetti Forum in Cernobbio, Italy.

Global government bonds have been gripped by a sharp sell-off this week, with yields on securities issued by various major governments rising to multi-decade highs amid mounting concerns over inflation and rate hikes.

Bond yields and prices move inversely to one another.

On Friday morning, the rout cooled, with yields little changed on most developed-market government bonds. U.S. Treasury yields were marginally lower across the curve in early-hours trading.

El-Erian, the Rene M. Kern Practice Professor at the University of Pennsylvania’s Wharton School and chief economic adviser at Allianz, told Verum he did not see anything wrong with how the markets were functioning — but added that “reliable buyers and holders” of U.S. Treasurys were coming under pressure.

“China, for geopolitical purposes, is no longer as willing,” he said. “Japan and the Gulf countries have domestic issues.”

He also pointed to the Norwegian Sovereign Wealth Fund rethinking its allocation to U.S. government bonds.

“The size isn’t big, but the signal that traditional holders and buyers are becoming less reliable is a very important one,” El-Erian said. “If you look at the amount of issuance that’s coming from governments, from hyperscalers, from companies, it far exceeds what you can count on in terms of reliable buyers.

“And that’s why there’s been pressure on interest rates. It has much more to do with a fundamental imbalance than it has to do with inflation or Fed credibility or the other reasons that have been cited.”

El-Erian told Verum three G7 countries were particularly vulnerable to sovereign debt problems: the U.K., Japan and France.

“Those by numbers, by everything else, and the U.K. in particular is what I call a high-beta country,” he said. “That every time rates move by a bit in the U.S., they move by a lot more in the U.K.”

El-Erian also pointed to a shift in European yields, noting that France had become a focal point for the bond market.

“In the old days you would worry about Italy. Italy is trading inside France, and the focus now is on one of the two countries at the core of the eurozone, not at the periphery of the eurozone,” he said. “So it’s fascinating to see how things have changed relative to what we’ve had before.”

U.S. Treasury department’s ‘step too far’

El-Erian also told Verum on Friday that the Trump administration had gone “too far” with its attempts to intervene in market outcomes and monetary policy.

Last month, the U.S. Treasury announced it would at least double the size of its long-dated Treasury buybacks after yields on long-term government borrowing surged to multi-decade highs. On Thursday, U.S. Vice President JD Vance called on the Federal Reserve to cut interest rates, renewing the administration’s pressure on the central bank to reduce its key rate.

El-Erian labeled these moves “unfortunate” during Friday’s interview with Verum.

“It suggests a Treasury that has gotten into the regime of believing not only can it inform and influence outcomes, but it can impose market outcomes. I think that’s a step too far,” he said. “And the question now is, how do you step back from this? I think the results are clear. It’s a massive market. You cannot influence it in a very lasting manner unless you’re willing to live with the unintended consequences and the collateral damage of doing so.”

Verum reached out to the U.S. Treasury Department for comment.

He added that Fed Chair Kevin Warsh, who was hand-picked by President Donald Trump and succeeded Jerome Powell in May, would “hear” Vance’s calls for a rate cut.

“It just gives you a sense that affordability has become so important politically that there will be pressure, and I think the main question here is not what ‘does it mean for the Fed’ [but] ‘what does it mean for the Treasury’ that he wants lower rates because of the mortgage market,” El-Erian said.

Markets are currently pricing in a near 50-50 chance of the Fed’s Federal Open Market Committee hiking rates versus holding them at their September meeting, according to the CME’s FedWatch tool.

Warsh gets ‘three things right’ at Jackson Hole

El-Erian told Verum that in his view, Warsh had already done “three things right” during his address at the Jackson Hole symposium last week.

“First, he addressed the concerns about his reaction function,” he said. “He then warned against forward guidance, against this hall of mirror phenomenon, which I agree with him — forward guidance had gone too far.”

“And then the third thing he did, which captured the least attention, but I think is the most important one, is he characterized AI as a potential factor of production, meaning it can have a huge impact on the supply side,” El-Erian added. “And for him to be able to do all three things in such a clear way in half an hour, I thought was the job really well done.”

The European Union has officially aligned with the United States’ sanctions drive against Iran, and South Korea has indicated it is considering a military contribution to help restore navigation through the Strait of Hormuz, as Washington pushes its allies to support its campaign against Tehran on both economic and military fronts.

U.S. Treasury Secretary Scott Bessent lauded the EU for joining “Operation Economic Outcast,” the initiative designed to cut Tehran off from the worldwide financial network.

“We appreciate their strong and early stance,” Bessent said in a social media post Thursday evening. “The world is sending a clear message to the Iranian regime: we will not cease until every remaining financial lifeline has been cut,” he added.

The remarks followed Brussels’ Aug. 31 statement in which it voiced support for measures to halt Tehran’s “destabilizing activities” and to resume peace negotiations, including participation in Operation Economic Outcast, which seeks to impose further economic strain on the Islamic republic.

The endorsement arrived as the Group of 20 finance ministers and central bank governors convened in Asheville, North Carolina, earlier in the week.

“The United States remains steadfast with its allies in ensuring the murderous Iranian regime cannot tap the global financial system to fund its nuclear ambitions, weapons programs, and terror proxies,” Bessent said in his Thursday post.

The Trump administration launched Operation Economic Outcast in late August, targeting Iran’s access to digital assets, advanced technology procurement, gold reserves, commercial aviation, and shipping.

Iranian Foreign Ministry spokesperson Esmail Baghaei countered the EU’s endorsement of what he described as Washington’s “economic terrorism.” In a Sept. 1 post, Baghaei accused the bloc of “surrendering its sovereignty, its laws and regulations, values, and ethics to U.S. coercion.”

Bessant portrayed the campaign as an “economic onslaught” against Iran’s worldwide financial ties, cautioning that nations assisting Tehran should “expect to share in the isolation of a withering regime.” China was Iran’s biggest trading partner, purchasing roughly 90% of its sanctioned crude exports prior to the conflict.

Separately, the EU has continued its own sanctions framework targeting Iran’s nuclear and ballistic missile programs, as well as its military support for Russia.

Ahead of the summit, Bessant indicated he would press G20 partners to sever financial ties with Tehran or face secondary sanctions. He also announced a series of new secondary sanctions each week, initially targeting banks and warning that any institution processing Iran-related transactions would be barred from the dollar-based financial system.

Seoul weighs Hormuz role

Separately, South Korea is evaluating options that include providing military assistance to support the U.S. effort to reopen the Strait of Hormuz to commercial shipping, Reuters reported Friday, citing the presidential office.

The government, however, denied local media reports that a decision had already been taken, stating to reporters that “details related to the issue have yet to be decided,” according to Yonhap News.

Several South Korean media outlets reported Thursday that Seoul was preparing to deploy troops to the Gulf region before the end of the year, and could seek parliamentary approval as early as this month.

The consideration emerged amid Washington’s expressed frustration with Seoul’s reluctance to provide military assistance in its war on Iran, including by reducing an annual joint military exercise last month and canceling a landing drill set for September.

Standoff

Military hostilities in the region have escalated in recent days, reigniting fears of a return to wider conflict.

The U.S. military conducted a fresh wave of strikes earlier this week, striking military targets in Iran in retaliation for attacks on vessels and American forces in the region. Iran has responded by firing missiles at U.S. bases across the Middle East.

Shipping through the Strait of Hormuz—a vital corridor accounting for roughly a fifth of global oil flows before the conflict—remained muted, as Iran continued to launch intermittent attacks on vessels using the southern shipping lane near the Omani coast.

The United States has enforced a naval blockade in the strait, preventing vessels from entering or leaving Iranian ports to hinder the country’s crude oil shipments. U.S. Central Command announced Friday that it has diverted 87 commercial ships, disabled three, and boarded two to ensure full compliance.