Gasoline Streak Points Toward US Stock Gains
by David Wilson
12:58p ET
(Bloomberg) -- Gasoline prices dropped for long enough to send U.S. stocks higher if history is any guide, according to Gina Martin Adams, a strategist at Wells Fargo Securities LLC.
The national average price for regular unleaded gas fell for 17 consecutive weeks before rising to $2.068 a gallon last week, according to data compiled by the U.S. Energy Department. This was the sixth streak of 13 weeks or more since 1990, when the department’s figures begin.
Standard & Poor’s 500 Index rose all but once in the three months after the previous series of gains ended. The exception occurred in December 2008 through March 2009, as the S&P 500’s biggest bear market since the Great Depression ended.
Energy stocks were among the index’s best performers in periods of “gasoline price fallouts,” Martin Adams wrote in a report yesterday. The New York-based strategist also cited raw-material and consumer-discretionary stocks. Retailers, media companies and automakers are in the latter category.
Phone companies and utilities did worst, according to data cited in the report. Their S&P 500 industry indexes were little changed after three months on average.
Streaks of 13 weeks or longer happened twice in the 1990s. In both cases, the S&P 500 increased more than 8 percent in the next three months. There was also a 5.5 percent advance in 2012 and a 2.8 percent gain in 2001-02.
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David Wilson
Reporter-at-Large, Bloomberg News
Stocks Editor, Bloomberg Radio
Author, Visual Guide to Financial Markets
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