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Oil and Broader Market Make Energy ETFs Bleed

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US equity indexes

On October 5–12, US equity indexes fell. Last week, the S&P 500 (SPY), the the Dow Jones Industrial Average (DIA), and the S&P Mid-Cap 400 (IVOO) fell 4.1%, 4.2%, and 4.9%, respectively. Energy stocks form ~5.9%, 5.2%, and 5.1%, respectively, of these equity indexes.

Oil and broader market making energy ETFs to bleed

Last week, US crude oil November futures fell 4%, while the Energy Select Sector SPDR ETF (XLE) fell 5.4%. XLE saw the fourth-highest fall among the SPDR ETFs that break the broad market into subsectors. The fall in oil prices and broader market indexes might be behind the fall in energy stocks. Rising yields, earnings, and trade war concerns might have pulled the broader market. The factors that we discussed in Part 1 might have pulled oil prices.

Last week, the Utilities Select Sector SPDR ETF (XLU) fell 1.3%—the least on our list. The Materials Select Sector SPDR ETF (XLB) fell 6.7%—the most on our list. All of the SPDR ETFs that break the broad market into subsectors ended in the red in the week ending October 12.

Energy ETFs

In the week ending on October 12, major energy subsector ETFs’ price metrics were:

  • The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) fell 5.7%.
  • The VanEck Vectors Oil Services ETF (OIH) fell 5.5%.
  • The VanEck Vectors Oil Refiners ETF (CRAK) fell 3.6%.
  • The Alerian MLP ETF (AMLP) fell 2.4%.

The fall in US crude oil prices and the broader market might be behind the fall in these energy ETFs last week.

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