10 Dec

Why Are Oil and Equity Indexes Diverging?

WRITTEN BY Rabindra Samanta

US equity indexes

On November 30–December 7, US equity indexes ended in the red. Last week, the S&P Mid-Cap 400 (IVOO), the S&P 500 (SPY), and the Dow Jones Industrial Average (DIA) fell 5.2%, 4.6%, and 4.5%, respectively. Energy stocks form ~5.1%, 5.9%, and 5.2%, respectively, of these equity indexes.

Why Are Oil and Equity Indexes Diverging?

Oil, broader market, and energy ETFs

Last week, US crude oil January futures rose 3.3%, while the Energy Select Sector SPDR ETF (XLE) fell 3.1%. XLE saw the second-lowest decline among the SPDR ETFs that break the broad market into subsectors. The broader market indexes might have a significant role in XLE’s fall. Equity indexes have fallen due to concerns about a contraction in the yield spread.

Last week, the Utilities Select Sector SPDR ETF (XLU) rose 1.6%—the highest rise on our list. The Financial Select Sector SPDR ETF (XLF) fell 6.9%—the biggest fall on our list during this period. Most of the SPDR ETFs ended in the red last week.

Energy ETFs

In the week ending on December 7, major energy subsector ETFs’ price metrics were:

  • The Alerian MLP ETF (AMLP) fell 0.9%.
  • The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) fell 3.9%.
  • The VanEck Vectors Oil Refiners ETF (CRAK) fell 4.3%.
  • The VanEck Vectors Oil Services ETF (OIH) fell 6.6%.

The fall in the broader market might have been behind the fall in these energy ETFs last week.

Latest articles

20 Jun

Will Refiners’ Earnings Plunge in 2019?

WRITTEN BY Maitali Ramkumar

Wall Street analysts expect refining firms' earnings to fall in 2019. Delek US Holdings (DK) and Valero Energy’s (VLO) earnings are estimated to fall less than 10% in 2019. However, the EPS of Marathon Petroleum (MPC), HollyFrontier (HFC), and Phillips 66 (PSX) are expected to fall 20%–40% this year.

After remaining tepid for the first four months of the year, gold prices have taken off in a big way. The initial impetus was provided by a tweet made by President Donald Trump on May 5, which revived trade tensions in a big way.

20 Jun

How Are Charter’s Revenues Trending in 2019?

WRITTEN BY Ambrish Shah

In the first quarter, Charter Communications (CHTR) reported total revenues of $11.2 billion—a rise of 5.2% year-over-year and $7 million ahead of the consensus estimate.

This morning before the market opened, Tesla (TSLA) was trading on a negative note despite a sharp rise in index futures. As of 9:10 AM ET, Tesla stock had fallen 1.2% in the pre-market session to $234.74 after Goldman Sachs cut the target price on the company by about 21%.

The US-China trade war has already given a scare to Apple’s (AAPL) investors vis-à-vis the possibility of a 25% tariff on Apple goods being imported from its Chinese facilities. As a result, Apple might be considering shifting its plants out of China.

Yesterday, Greenlane Holdings (GNLN) fell a whopping 17.1%. The stock has now fallen 28% this month, and it hit its all-time low yesterday. Greenlane Holdings listed in April and priced its IPO at $17 per share. However, since the stock surged more than 25% after its listing, it has been a sorry story for Greenlane Holdings investors.