US equity indexes
On November 15–21, US equity indexes had the following correlations with US crude oil January futures:
These three equity indexes have exposure of ~5.1%, ~5.2%, and ~5.9% to the energy sector, respectively. The equity indexes fell 1.9%, 3.3%, and 2.9%, respectively, in the trailing week. US crude oil January futures fell 3.6% during this period.
Oil’s fall and equity indexes
The correlation indicates a positive relationship between oil and these US equity indexes.
The factors that we discussed in Part 1 could be responsible for oil’s fall. Apart from oil’s decline, these equity indexes might have fallen due to concerns about the trade war and the fall in technology stocks.
On November 15–21, the Energy Select Sector SPDR ETF (XLE) fell 0.6%—the smallest decline on our list.
In the next part of this series, we’ll discuss the important price level for US crude oil next week.