8 Mar

Analyzing Oil’s Rise and Equity Indexes

WRITTEN BY Rabindra Samanta

US equity indexes

On February 28–March 7, US equity indexes had the following correlations with US crude oil April futures:

  • the S&P Mid-Cap 400 (IVOO): -60.6%
  • the S&P 500 (SPY): -77.3%
  • the Dow Jones Industrial Average (DIA): -89.1%

Analyzing Oil’s Rise and Equity Indexes

These three equity indexes have exposure of ~5.1%, ~5.9%, and 5.2% to the energy sector, respectively. The equity indexes fell 2.3%, 1.3%, and 1.7%, respectively, in the trailing week. US crude oil April futures fell 1% during this period. US crude oil prices ended in the red due to weakness last week.

Oil’s rise and equity indexes

The correlations indicate an inverse relationship between oil and these US equity indexes. In recent months, movements in the broader market dominated oil prices.

On February 28–March 7, the Energy Select Sector SPDR ETF (XLE) fell 0.2%—the least decline among the SPDR ETFs that break the broad market into subsectors. US equity indexes were in the red, which might have dragged XLE.

The Industrial Select Sector SPDR ETF (XLI) fell 2.5% and underperformed the SPDR ETFs in the last five trading sessions. During this period, the Communication Services Select Sector SPDR ETF (XLC) rose 0.6%—the outperformer among sector-based SPDR ETFs. Most of the SPDR ETFs ended in the red.

Next, we’ll discuss the important price levels for US crude oil next week.

Latest articles

19 Jul

Afya's IPO Sees Strong Listing Gains

WRITTEN BY Mohit Oberoi, CFA

Afya (AFYA) listed on the Nasdaq Global Select Market on July 19. The company priced its IPO at $19 per share.

19 Jul

What to Watch For in Amazon's Q2 Earnings

WRITTEN BY Sanmit Amin

e-Commerce giant Amazon (AMZN) is scheduled to report its second-quarter earnings results after the closing bell on July 25.

19 Jul

Barrick Gold Reaches Deal to Buy Acacia Mining

WRITTEN BY Anuradha Garg

After a long standoff, Barrick Gold (GOLD) and Acacia Mining (ABGLF) have reached an agreement.

19 Jul

Comcast Shares Pop on Goldman's Optimism

WRITTEN BY Ruchi Gupta

Comcast (CMCSA) shares popped after Goldman Sachs issued a positive note on the company recently. Goldman upgraded its rating for Comcast to "buy" from "hold."

19 Jul

Why Analysts Are Bearish on Netflix Stock

WRITTEN BY Aditya Raghunath

Netflix stock fell over 10.0% on Thursday and is down 0.5% today as well.

On Thursday, pet retailer Chewy (CHWY) reported its first-quarter results after the market closed. The company reported its earnings for the first time.