We started off the week on a rather dour note Monday, losing nearly 1% across all three major US equity market indices. Tuesday’s reversal was fueled by better than expected consumer-centric economic data. PMI Services Flash for September came in at 51.9 versus consensus calling for 50.9. Consumer Confidence for September, as measured by the Conference Board, lurched unexpectedly higher, coming in at 104.1 versus last month’s revised reading of 101.8. Consensus was expecting a drop to 98.8. Even the Richmond Fed Manufacturing Index reading for September was less negative (-8) than August’s (-11). With that back drop, US equity markets opened yesterday with a degree of positive momentum. That momentum was buttressed by the news out of OPEC and the EIA Petroleum Status Report (both discussed below).
Given the news out of the energy patch yesterday, energy names led the rebound in the broader market. On the day, the Energy Select Sector SPDR ETF (XLE) rose 4.32%. The Dow Industrials rose 0.60% while the S&P 500 rose .52% and the Nasdaq ticked a modest 0.24% higher. Volume rose on the New York Stock Exchange (+14.94%) as well as the Nasdaq (4.47%). The Dow 30’s outperformance on the day was tied directly to the fact that energy issues play a larger role in the composite makeup of that index than they do in the case of either the S&P 500 of Nasdaq.
My analysis on the crude narrative: It Took Eight Years, But...