Oil/Equities Link Breaking Up… WSJ – Commodity Research Group

April 19, 2016 by Jim Colburn Leave a Comment

Some interesting correlation numbers from the WSJ:(http://blogs.wsj.com/moneybeat/2016/04/18/is-the-link-between-stocks-and-oil-breaking-up/?mod=djem_EnergyJournal)

“But the link between the markets is starting to weaken. The correlation between the S&P and oil futures has been at 0.35 this month through Friday, well below the level of 0.94 for all of 2016 so far, according to WSJ Market Data Group. That’s higher than the correlation of negative 0.1 over the past 10 years, but still a sign the relationship is dissipating.”

“While changes in demand are seen as signals about the global economy, changes in supply say less about the outlook for stock investors, according to Peter Tchir, head of macro strategy at Brean Capital LLC.

“If oil is tracking demand views, they should move in the same direction,” he said. “But if oil is tracking supply views, that has far less of an obvious correlation.””

Commodity Research Group (CRG), founded by veteran analyst Edward Meir, is an independent research consultancy specializing in base and precious metals, as well energy products. The Group provides research and general price analysis for these markets, along with advice to companies seeking to construct commodity hedging strategies.

Our associates bring decades of experience to the table, as they seek to help our clients understand the markets. CRG will distill the myriad of pricing variables mentioned above into coherent research that is to-the-point and tailored to a clients hedging or pricing needs. In addition, CRG is available for consulting assignments and speaking engagements. CRG does not manage money or trade for itself.

Reader Interactions

Leave a Reply Cancel reply