With only a quick glance, arguably most investors would be tempted to walk away from midstream energy giant Enbridge (ENB). A multinational pipeline operator, Enbridge undoubtedly commands infrastructural relevance. However, both the business and the broader hydrocarbon industry suffers from two major headwinds, initially posing significant challenges to ENB stock.
First, the Federal Reserve recently resumed its interest rate hikes in July after holding off in June. While the central bank recognized progress in its disinflationary objectives, consumer prices remain significantly elevated from policymakers’ core target. Fundamentally, then, higher borrowing costs don’t bode well for the wider commodities sector, including energy products. That’s not great news for ENB stock.
