U.S. energy stocks weakest since the Great Depression

U.S. energy stocks are weaker than they have been since the Great Depression, according to Michael Hartnett, Bank of America Corp.’s global chief investment strategist. 

Hartnett cited a ratio between oil and gas shares and the S&P 500 Index in a report Thursday. 

The comparison was based on the S&P 500 Energy Index, calculated since 1990, and an earlier industry gauge from Global Financial Data. S&P’s index set a record low relative to the S&P 500 on March 18 after plummeting 85% from a record in July 2008. 

Investors who go against their peers “would buy some U.S. oil stocks,” he wrote.

Energy stocks play a diminishing role in the S&P 500 Index

Energy stocks have played a diminishing role in the S&P 500 Index for years, and a rally Monday did little to reverse the trend. The industry’s weight in the S&P 500 has plummeted as much as 73% from a record in July 2008, according to data compiled by Bloomberg. Oil and gas producers and service companies fell last month to their lowest share of the index’s value, 4.37%, since the S&P 500 Energy Index was first calculated in 1989. The group’s weight rose Monday by 0.16 percentage point, to 4.72%, as the index itself climbed 3.3%.

 

Energy stocks approach 15-year low relative to S&P 500

U.S. energy stocks have gone from bad to worse during an unprecedented decline in oil prices. The share-price ratio between the Energy Select Sector SPDR and SPDR S&P 500 exchange-traded funds closed Tuesday at its lowest level since December 2003, according to data compiled by Bloomberg. The shares’ weakness points to potentially much greater downside for crude,” Callum Thomas, founder and head of research at Topdown Charts, wrote in a blog post Monday with a similar chart. Oil futures have fallen for the past 12 trading days, the longest streak ever, in New York trading.