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Crude Oil Distress May Be Bullish Signal for Stocks, BTIG Says

  • Emanuel says dislocation may augur S&P 500, energy-stock gains
  • Strategist is watching $20/barrel level on June oil contract
'Bomb Train' Terminal Suits Seen Slowing U.S. Oil Independence
Photographer: David Paul Morris/Bloomberg

The unprecedented plunge in oil prices may actually be a bullish sign for both crude futures and U.S. stocks, according to BTIG LLC.

Large historic dislocations between front and second-month oil futures have traditionally been positive omens for markets, wrote strategist Julian Emanuel in a note Monday. At their most extreme, they have presaged “reliably positive” forward returns for the S&P 500 Index, energy shares and front-month contracts, especially on a six- and 12-month basis, he said.