Between October 27 and November 3, 2017, the United States Oil Fund LP (USO) rose 3.1%—just ten basis points below the rise of US crude oil December futures. USO aims to track US crude oil near-month futures.
The United States 12-Month Oil Fund ETF (USL) follows US crude oil futures contracts one year out from the near-month futures contracts. USL rose 2.7% during this period.
But the ProShares Ultra Bloomberg Crude Oil ETF’s (UCO) returns were more than twice that of US crude oil last week. UCO rose 6.5% over this period, outperforming the above oil ETFs. UCO’s objective is to deliver two times the daily price fluctuations of the Bloomberg WTI Crude Oil Subindex.
On February 11, 2016, US crude oil (DBO) (OIIL) active futures plunged to their lowest in the past 12 years. Between February 11, 2016, and November 3, 2017, US crude oil futures more than doubled. However, USO, USL, and UCO gained 39.9%, 36.9%, and 56.8%, respectively, during this period.
These oil ETFs underperformed US crude oil futures because of a negative roll yield. Remember, the price difference between two consecutive futures contracts can impact the roll yield, and so if active futures trade at less than the following month’s contract, it could reduce these ETFs gains.
In the case of UCO, the compounding of its daily price changes over a long span may also be behind the deviation between its actual return and its expected return.
On November 3, 2017, US crude oil futures contracts to March 2018 settled at progressively higher prices. For more analysis on the oil futures spread, check out Market Realist’s series Is the Oil Market Balancing?
The EIA's crude oil and natural gas inventory data will be crucial to watch this week alongside oil and natural gas prices.
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.