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Does Energy Contribute to Wall Street’s Gains?

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Energy sector versus the broader market

From December 8–15, 2016, the Energy Select Sector SPDR ETF (XLE) only rose 0.1%. It was the fifth-highest rise among the sector-based SPDR ETFs that we’ll cover in this part of the series.

US crude oil (USO) (USL) January futures rose 0.1% from December 8–15 due to the factors we looked at earlier in this series. The slight gain in XLE corresponds to the slight rise in crude oil prices.

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SPDR ETFs

Among the SPDR ETFs, the Health Care Select Sector SPDR ETF (XLV) rose the most. It rose ~2.7% from December 8–15, 2016.

During this period, the S&P 500 Index (SPY) (QQQ) (IVV) (VFINX) (IWM) rose 0.7%. The slight rise in XLE contributed to the gains in the broader market. The energy sector accounts for ~7.3% of the S&P 500.

Crude oil this week

On December 16, 2016, at 2:19 AM EST, US crude oil (OIIL) was trading at $51.07 per barrel—an 0.8% fall compared to its closing price on December 9, 2016. Crude oil will likely close on a negative note this week. From December 2–December 9, 2016, crude oil fell 0.3%.

Moves in crude oil (SCO) prices are an important factor for ETFs such as the iShares US Oil Equipment & Services ETF (IEZ), the SPDR S&P Oil & Gas Equipment & Services ETF (XES), and the Guggenheim S&P 500 Equal Weight Energy ETF (RYE).

In the final part of this series, we’ll see how crude oil and natural gas drive energy ETFs.

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