US equity indexes

In the trailing week, US equity indexes had the following correlations with US crude oil active futures:

  • the Dow Jones Industrial Average (DIA): 65.7%
  • the S&P 500 (SPY): 48.9%
  • the S&P Mid-Cap 400 (IVOO): 27.4%

Have Equity Indexes Limited Oil’s Fall?

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These three equity indexes have exposure of ~5.4%, ~5.4%, and ~3.7% to the energy sector, respectively. The equity indexes returned 1.1%, 0.4%, and 0.2%, respectively, on April 10–17. US crude oil active futures fell 1.2% during this period.

Oil’s fall and equity indexes

The correlations indicate a positive relationship between oil and these US equity indexes. In recent months, movements in the broader market have dominated oil prices. This week, oil prices were dominated by market concerns that OPEC and its allies might not extend the production cut into the second half of 2019.

In the trailing week, the Energy Select Sector SPDR ETF (XLE) rose 0.3%. XLE gained the least among the SPDR ETFs that break the broad market into subsectors. The rise in the broader market might have helped XLE’s upside.

The Health Care Select Sector SPDR Fund (XLV) fell 6.5% and underperformed the SPDR ETFs in the trailing week. With a rise of 3.5%, the Financial Select Sector SPDR Fund (XLF) outperformed other SPDR ETFs. Most of the SPDR ETFs ended in the green.

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