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Has Oil Helped the S&P 500?


Jun. 14 2019, Published 3:37 p.m. ET

US equity indexes

In the last week, US equity indexes’ correlation with US crude oil active futures has been as follows:

  • the Dow Jones Industrial Average (DIA), 78%
  • the S&P 500 (SPY), 75.5%
  • the S&P Mid-Cap 400 (IVOO), 75.2%

These three equity indexes have exposure of ~5.1%, ~5.2%, and ~3.6% to the energy sector, respectively. The equity indexes rose 1.5%, 1.7%, and 1.6%, respectively, between June 6 and 13, while US crude oil active futures fell 0.6%.

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Oil and equity indexes

The above figures indicate a positive correlation between oil and US equity indexes. However, individual factors dominated oil and the equity indexes’ returns. US crude oil inventory levels’ rise dragged down oil prices, and trade talk optimism supported the S&P 500 (SPY). Oil prices’ rise yesterday because of a supply shock may have boosted the S&P 500.

Comparing the energy and broader markets

In the last week, the Energy Select Sector SPDR ETF (XLE) has risen 0.7%, the third least among SPDR ETFs. Broader markets’ recovery may have boosted XLE amid weak oil prices. The Utilities Select Sector SPDR ETF (XLU) was the only SPDR ETF to decline, falling 0.5%, and the Consumer Discretionary Select Sector SPDR ETF (XLY) was the strongest, rising 3.6%. Most SPDR ETFs rose.


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