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Analyzing Commodities and the S&P 500

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S&P 500’s performance  

The S&P 500 rose ~1.1% to 2,706.39 on April 17, 2018, due to optimism about strong 1Q18 earnings results. Analysts estimate that S&P 500 companies’ earnings could rise 18.6% in 1Q18, which would be the highest increase in seven years, according to Reuters. Nine out of the ten major sectors in the S&P 500 rose on April 17, 2018.

The SPDR S&P 500 ETF (SPY) rose ~1.1% to $270.13 on April 17, 2018. SPY aims to track the performance of the S&P 500 Index.

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S&P 500’s sectoral performance 

The consumer discretionary, technology, and real estate sectors rose 1.8%, 1.8%, and 1.3%, respectively, on April 17, 2018. These sectors supported SPY the most on April 17, 2018.

The energy sector, which accounts for ~6% of the S&P 500 Index, rose 0.4% on April 17, 2018. The Energy Select Sector SPDR ETF (XLE) rose ~0.4% to $72.4 on April 17, 2018. XLE represents the S&P 500 Index’s energy sector.

The sentiment in the equity and commodity markets could impact each other depending on the magnitude of the moves and various fundamental factors impacting each market.

Commodities 

May 2018 WTI crude oil futures contracts rose 0.5% to $66.52 per barrel on April 17, 2018. Prices rose due to geopolitical tension in the Middle East. The United States Oil ETF (USO) rose 0.2% to $13.41 on April 17, 2018. USO aims to track active WTI oil futures’ performance.

May 2018 US natural gas futures fell 0.5% to $2.73 per MMBtu (million British thermal units) on April 17, 2018. Prices declined despite cold weather forecasts. The United States Natural Gas ETF (UNG) fell 0.4% to $22.59 on April 17, 2018. UNG aims to track active natural gas futures’ performance.

The iShares S&P GSCI Commodity-Indexed Trust (GSG) fell 0.06% to $17.08 on April 17, 2018. GSG aims to follow an index composed of a diversified group of commodities futures.

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US Dollar Index  

The US Dollar Index rose ~0.1% to 89.5 on April 17, 2018. The Power Shares DB US Dollar Bullish ETF (UUP) was flat at 23.46 on April 17, 2018. UUP aims to follow the performance of the Deutsche Bank Long USD Currency Portfolio Index – Excess Return. The US Dollar Index and commodities, like crude oil and gold, are usually inversely related.

Series overview 

In this series, we’ll discuss the API’s US crude oil and gasoline inventories. We’ll also discuss the US Dollar Index and some crude oil price forecasts.

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