Stocks fell on five of seven October days when Brent rose, but the biggest oil moves split

Across the 19 October trading days for which both the S&P 500 and the Brent crude price are available, the stock index fell on five of the seven days when Brent rose, according to closing data from S&P Dow Jones Indices and the US Energy Information Administration, both compiled by the St. Louis Fed. On the days Brent fell, the index fell on three of 12. The four largest oil moves of the month do not follow that pattern.

What the daily data show

The comparison uses each day's close from October 1 through October 27, measured against the previous close. Brent's close for October 28 had not been posted when this was written, so the last pair is October 27. Brent is the European benchmark spot price in dollars a barrel.

Brent rose on seven of the 19 days, and the S&P 500's average change on those days was -0.3%. On the 12 days Brent fell, the S&P 500's average change was +0.3%. The counts and averages are computed from the daily closes.

The seven days when Brent rose include October 2, when the benchmark went to $135.51 from $114.82 the day before, an increase of 18.0% (computed). The S&P 500 rose 0.7% that day, to 7,722.72 from 7,666.45. Without that day, the S&P 500 averaged -0.5% on the six other days when Brent rose.

The four largest oil moves

Four days brought a Brent move of more than 5% in either direction, and they split evenly.

• October 2: Brent +18.0%, S&P 500 +0.7%.
• October 5: Brent fell 7.4% to $125.51, and the S&P 500 rose 0.7% to 7,773.95.
• October 16: Brent fell 5.6% to $119.33, and the S&P 500 fell 1.1% to 7,659.44.
• October 22: Brent rose 6.8% to $125.39, and the S&P 500 fell 1.2% to 7,663.43.

All percentages are computed from the daily closes. On October 22 the stock index fell with oil rising; on October 16 it fell with oil falling. A single rule, in which stocks fall when oil rises, would have predicted two of these four days. The data do not say why the index moved on any of them, because daily closes combine every development in the session.

Where volatility and yields fit

The Cboe Volatility Index (VIX), a gauge of expected stock-market swings, reached its October high of 19.99 on October 16, the day the S&P 500 fell 1.1%, according to Cboe data compiled by the St. Louis Fed. It stood at 16.91 on October 28.

The 10-year Treasury yield offers a second contrast. On October 22 it fell to 4.96% from 5.13% the day before, a drop of 17 basis points (computed), according to the Treasury Department's daily par yield curve, on the day Brent rose 6.8% and the S&P 500 fell 1.2%. A move in oil prices therefore did not carry the usual direction in yields on that day either, and the data again leave the cause open.

The background

Brent has been volatile for a year. FinanceInTime's analysis of the price range showed that it ranged from $59.93 to $138.21 over the year, with Middle East flows constrained. Against that range, October's closes between $114.82 and $135.51 were in the upper part.

Stocks held up better than the oil swings might suggest. The S&P 500 closed at 7,743.98 on October 28, 1.2% above its 7,651.54 close on September 30 (computed). Its closing high for the month so far was 7,818.93 on October 6, and the October 28 close was 1.0% below that (computed). FinanceInTime has reported on the October 22 selloff in chip stocks and on how far the Nasdaq stands below its record, which suggest that sector moves also mattered on some of the days in the sample.

Every day in the sample

The table lists each day's change in the two closes from the previous trading day, in percent (computed from the daily closes). The first row compares October 1 with September 30.

Date	Brent	S&P 500
October 1	-0.9%	+0.2%
October 2	+18.0%	+0.7%
October 5	-7.4%	+0.7%
October 6	-0.1%	+0.6%
October 7	+0.4%	-0.2%
October 8	+3.3%	-0.5%
October 9	-0.1%	+0.6%
October 12	-0.1%	-0.1%
October 13	-3.2%	-0.0%
October 14	+0.6%	-1.1%
October 15	-0.2%	+0.3%
October 16	-5.6%	-1.1%
October 19	-0.4%	+0.4%
October 20	-3.0%	+0.3%
October 21	+1.9%	+0.6%
October 22	+6.8%	-1.2%
October 23	+2.3%	-0.5%
October 26	-0.1%	+0.7%
October 27	-3.9%	+0.6%

Limits of the comparison

Nineteen days is a short sample, and the table shows it: several of the moves on both series are under 0.5%, and a count of days is sensitive to a few observations. Changing one large day, such as October 2, changes the averages. Daily closes of the S&P 500 are taken in New York in the afternoon, while the Brent spot price is a daily assessment set in a different market session, so the two series do not measure the same moment. A different start date, or the use of the Nasdaq Composite or the Dow Jones Industrial Average in place of the S&P 500, could change the counts, and none of those alternatives was tested here. The comparison shows how the closes lined up and does not test whether oil prices drove stocks.

What to watch

Brent's closes for October 28 and later days will be added to the St. Louis Fed's series, and the S&P 500 close for October 29 had not been posted either. As more days arrive, the counts above will change. Each new close adds one row to the table above, and whether the October pattern persists will be visible only in those later closes, and a pattern in a month of data may not repeat.