Oil vs. the S&P500

This year the major U.S. markets have been driven largely by what has happened in oil markets. Higher oil means lower stocks, and vice-versa. Right?

Well, here is a graph of the correlation between oil futures and the S&P 500 on a daily basis for the current calendar year. As you can see, there have been two periods during the year when oil really drove the S&P 500 down, and one period when the S&P 500 rose merrily, despite higher oil prices. Of late, however, the relationship between oil and the markets seems to have begun to break down.

Comments

[punk_ash:]

must be tough to write such insightful and rigorous articles.

2008 Aug 04 05:02 PM

[Filip Coulier:]

I wouldn't go as ar as punk_ash, but what's your point? If your point is that in a bear market after a while a stock becomes just a stock, no mater what industry it relates to -oil or not- I kind of agree...

2008 Aug 04 05:18 PM

[webronin:]

I think there is probably something wrong with their content upload system and it's cutting the rest of the article.

2008 Aug 04 07:23 PM