Oil’s role

In the seven calendar days to November 2, 2017, the correlations of the S&P 500 Index (SPY) and the S&P 400 Mid-Cap Index (IVOO) with US crude oil active futures were at 79.3% and 54.1%, respectively. These equity indexes rose 0.8% and 0.1%, respectively, during this period. US crude oil active futures rose 3.6% during this period.

How Oil Is Affecting Wall Street’s Performance

Between October 26 and November 2, 2017, the Dow Jones Industrial Average Index rose 0.5%. It had a correlation of just -1.2% with oil prices. Oil and gas stocks constitute 9% of this index. The S&P 400 Mid-Cap Index’s exposure to energy sector stocks is ~3.9%. The S&P 500 Index’s allocation to energy stocks is 5.9%.

European equity index the FTSE 100 Index (EWU) rose 0.9% in the trailing week. It had a correlation of just 11% with Brent crude oil active futures. However, the CAC 40 Index (EWQ) rose 1% perhaps because of a 2.7% rise in Brent crude oil January futures over this period. The CAC 40 Index had a correlation of 49.4% with Brent crude oil prices during this period. Both these European equity indexes have an allocation of over 10% to oil and gas stocks.

The movement in natural gas prices may not impact these equity indexes because, in the short term, natural-gas-weighted stocks may move independently of natural gas prices based on their correlations with natural gas.


The rise in US crude oil prices could have helped the Energy Select Sector SPDR ETF (XLE) to rise 1.9% between October 26 and November 2, 2017. It was the third-largest gainer among our list of sector-based SPDR ETFs. The Technology Select Sector SPDR ETF (XLK) rose 3.4%, the most among the sector-based SPDR ETFs during the same period. However, the SPDR S&P Telecom ETF (XTL) fell 3.5%, the most among the SPDR ETFs during this time period.

Latest articles

The Hot Chips 31 Symposium started this week. Artificial intelligence was the hot topic among participants Intel, NVIDIA, and Advanced Micro Devices.

Today, Slack (WORK) opened 4.5% higher after MKM Partners analyst Rohit Kulkarni gave Slack stock a "buy" rating with a target price of $40.

Today, Aphria announced a deal with ParcelPal to deliver medical cannabis to patients. Also, Cole Cacciavillani's son has won a cannabis store license.

Today, IHS Markit released the US manufacturing PMI (purchasing managers’ index) data for August. The manufacturing PMI hit 49.9, down from 50.4 in July.

On May 1, smokable hemp will be banned in North Carolina. The state passed the North Carolina Farm Act, removing smokable hemp from its permissible list.

Chinese tech giant Tencent (TCEHY) posted better-than-expected Q2 earnings. Its revenue growth accelerated in Q2 due to a rebound in its gaming segment.