08:15:35 EDT Fri 29 Mar 2024
Enter Symbol
or Name
USA
CA



Post says TSX would lead way with oil-price rebound

2014-12-10 06:54 ET - In the News

The Financial Post reports its Wednesday edition it probably goes without saying that a positive change in the fortunes of oil would give the S&P/TSX composite index a huge boost. The Post's David Pett says Jeremy Hale, Citigroup's global macro strategist, looked at five previous drops in oil prices of 35 per cent or more and the corresponding moves in a number of asset classes, including equities, in the six months before and after the correction. "In the 6 months preceding oil price weakness, equities tend to trade broadly flat," he said in a note. "Moreover, we find that during periods of oil price weakness equities end modestly up." The S&P 500 climbed 1 per cent on average six months before oil corrects, climbed 9.3 per cent during the correction and fell 3.3 per cent six months after it bottoms. "Emerging equity markets, by contrast, tend to fare much better, albeit dominated by the (now unfashionable) oil exporters (Russia, Brazil) rather than the net importers," the strategist said. "But with emerging market equities, especially the exporters, lacking in momentum, it seems that equity investors are taking the view that oil prices aren't close to bouncing."

© 2024 Canjex Publishing Ltd. All rights reserved.