Correlation between Schlumberger and crude oil
The correlation coefficient between Schlumberger’s (SLB) stock price and the West Texas Intermediate (or WTI) crude oil prices from October 2, 2016, to October 2, 2017, was 0.59. This indicates a robust positive relationship between Schlumberger stock and crude oil prices.
The VanEck Vectors Oil Services ETF’s (OIH) correlation with crude oil since October 2, 2016, is 0.69. OIH tracks an index of 25 oilfield equipment and services (or OFS) companies. Schlumberger’s correlation with the Dow Jones Industrial Average (DJIA-INDEX) since October 2, 2016, is 0.31.
Has SLB’s correlation with crude oil price changed?
As we can see in the chart above, SLB’s correlation with crude oil prices is lower in the trailing year to October 2, 2017, compared to the previous year to October 2, 2016. Crude oil prices are ~4% higher compared to a year ago.
A high correlation bodes well for SLB’s stock price, with crude oil prices strengthening over the past four weeks. OIH’s correlation with crude oil is also lower in the trailing year to October 2, 2017, versus the previous two years.
Correlation between SLB’s peers and crude oil price
Oil States International’s (OIS) correlation coefficient since October 2016 is 0.51, while National Oilwell Varco’s (NOV) correlation coefficient since October 2, 2016, was 0.53. You can read more about NOV in Market Realist’s What Lies Ahead for National Oilwell Varco in 2017.
CARBO Ceramics’ (CRR) correlation coefficient with crude oil prices since October 2, 2016, is 0.42. Similar to Schlumberger, the correlation coefficient between the stock prices of OIS and CRR and crude oil prices decreased in the past year compared to the previous year.
In the final part of this series, we’ll discuss analysts’ recommendations for Schlumberger.
Things have been getting uglier for SCANA (SCG) since it abandoned the V.C. Summer nuclear power plant a few months ago. Its stock is racing to the bottom.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.