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Energy Stocks Still Favored, SPY and EWU Dip on August 31

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Energy Stocks Still Favored, SPY and EWU Dip on August 31 PART 1 OF 4

Energy Stocks Advance with Rising Oil Prices, SPY Down by 0.81%

Consol Energy leads SPY, gaining 5.84% on August 31

Energy stocks continued their upward movement for the fourth straight day while the SPDR S&P 500 ETF (SPY) fell by 0.81% on August 31. Consol Energy (CNX) advanced by 5.84% on Monday, August 31, returning 29.62% in the trailing five days.

CNX has a beta of 0.81, which implies less risk as it is less than one. CNX is rated as “stable” by Moody’s and Standard & Poor’s in terms of debt outlook. CNX has 11 “buy” recommendations against two “sell” and ten “hold” recommendations.

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Chesapeake Energy and Newfield Exploration

Consol Energy was followed by Chesapeake Energy (CHK), which had a 5.68% return, and Newfield Exploration (NFX), which had 5.41% return on August 31. Both companies engage in oil and gas exploration and production. The stocks gained on the rising oil prices and the falling US oil inventory.

Chesapeake Energy (CHK) has a beta of 1.22, implying its sensitivity toward market movements. The stock currently has 21 “hold” recommendation versus eight “buy” and seven “sell” recommendations. The stock is rated as “stable” by Moody’s.

Newfield Exploration (NFX) is given a growth stock score by Zacks Investment Research. The stock returned gains of 20.56% for the trailing five days. It has received 24 “buy” recommendations against nine “hold” recommendations and no “sell” recommendations. Its outlook is “stable,” according to Moody’s and Standard & Poor’s.

Wynn Resorts takes a back seat on August 31

The stocks at the bottom of the SPY ETF were Wynn Resorts (WYNN), Apartment Investment and Managment (AIV), and Nextera Energy (NEE). On August 31, these stocks yielded -4.03%, -3.71%, and -3.35%, respectively. WYNN is a publicly traded company that engages in the development and operation of high-end hotels, lodging, casinos, and gaming operations.

Wynn Resorts’ business activity was hit by the turmoil in the Chinese stock market as well as the slowdown in its economy. The company has major operations in Las Vegas and Macao, and 75% of the company’s gross income comes from its Macao operations. Wynn Resorts’ Macao operations are adversely affected by the devaluation of the Chinese yuan because casinos and gaming operations transact in Hong Kong dollars. This makes these activities expensive for Chinese gamblers, resulting in falling revenues for WYNN from the region.

In the next part, let’s look at the other sectors of SPY.

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