Oil is the Energy Sector

Analyzing a strong relationship

While renewables may be considered the future, the energy sector of the S&P 500 is still tied down to the price of oil:

In the finance world, where data can be noisy and strong relationships can be hard to find, that’s a pretty clear relationship!

One consequence of this chart is that average investors probably don’t need to allocate funds toward energy ETFs like USO. If you have exposure to the broader S&P 500, you essentially already have oil exposure. You don’t need a complicated ETF that will way you alive on fees.

More Metrics

The energy sector has done terribly since the beginning of the year

Job openings ticked down last month, suggesting a continuation of the downtrend

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