Bespoke's work appeared in a feature article on the US Dollar in Barron's on April 26th. Please click here to view the article. Our work on oil bull and bear markets was also mentioned in Kopin Tan's The Trader column in Barron's. Below is an excerpt from the article:
AS REGULAR READERS KNOW, this column is a fan of the always timely research from Bespoke Investment Group, and crude oil pushing $119 last week prompted its analysts to wade through the current gush.
Crude has enjoyed 22 bull markets since 1986, defined as a rally of 20% or more coming after a 20% decline. The average bull market lasted 242 days and racked up gains of 67.85%. So the current bull run is twice as long and twice as strong, with crude having risen more than 136% over 463 days since its lull on Jan. 18, 2007.
What happens when this raging, aging bull eventually tires? The average bear market saw a 32% oil-price drop over 125 days. When that happened, the boost to disposable income was welcome news for consumer-discretionary companies, lifting their stocks by an average 10.07%. Other standouts in an oil bear market include consumer staples (up an average 9.74%), financials (9.45%), transports (9%) and industrials (7.34%). They all outpaced the S&P 500's 5.74% gain when oil retreated.
In contrast, utilities rose just 3.46% in an oil bear market, while technology stocks -- which attract investors by being less directly affected by high oil -- gained just 3.17%. The energy sector fell 1.47%.
"Energy stocks that have gone up the most during the current oil rally will probably get hit the hardest," Bespoke analysts note. With gains of between 120% and 158% since January 2007, stocks like Consol Energy (CNX), National Oilwell Varco (NOV), Range Resources (RRC) and Hess (HES) have milked the most from this oil gush, and might have the most to lose when oil subsides.