US equity indexes
In the trailing week, US equity indexes had the following correlations with US crude oil active futures:
- the S&P 500 (SPY): 62.8%
- the Dow Jones Industrial Average (DIA): 30.7%
- the S&P Mid-Cap 400 (IVOO): 18.8%
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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 have risen 2.3%, 2.6%, and 2.4%, respectively, between March 28 and April 4. US crude oil active futures rose 4.7% during this period.
Oil’s rise and equity indexes
The correlations indicate a positive relationship between oil and most of these US equity indexes. In recent months, movements in the broader market have dominated oil prices. Apart from the broader market, the fall in US oil production is another important reason for oil’s rise.
In the trailing week, the Energy Select Sector SPDR ETF (XLE) has risen 0.3%. XLE was the second-smallest gainer among the SPDR ETFs that break the broad market into subsectors. A fall of 2.5% in natural gas in the trailing week might have capped XLE’s upside.
The Consumer Staples Select Sector SPDR Fund (XLP) has fallen 0.6% and has underperformed the SPDR ETFs in the trailing week. During this period, the Materials Select Sector SPDR Fund (XLB) rose 5.1% and was the top gainer among sector-based SPDR ETFs. Most of the SPDR ETFs ended in the green.
AT&T (T) is scheduled to report its first-quarter results on April 24. Wall Street analysts expect AT&T’s earnings to rise in the first quarter.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.