Oil prices spin around investors’ sentiment

Print

Written by Sebastian Wanke | 15 December 2014
Posted in Special research

The strong fall in oil prices leaves its traces in the sentix Sector Sentiment. On the one hand, the sentiment for European oil and gas stocks drops to an all-time low. The same holds true for basic resources shares. On the other hand, some also benefit from the cheaper "black gold". "Travel and Leisure" as well as "Consumer Goods" are among those for which investors' perspectives brighten.

In December, remarkable developments can be observed in sentix Sector Sentiment: indices for several sectors reach extremes at the same time. We note all-time lows in sentiment for European oil and gas stocks as well as for basic resources shares. Furthermore, the indices for the travel and leisure sector and for consumer goods stocks climb to all-time highs!

Behind these developments should mainly be the continued fall in oil prices. And one man's poison is another man's meat: While the energy and basic resources industries suffer from lower raw materials prices, consumers' purchasing power increases and many companies input costs soften. This is why investors' sentiment improves so visibly for such sectors as travel and leisure or consumer goods.

Usually sentiment extremes, especially negative ones, are contrarian signals. Does this mean that the oil and gas or the basic resources sectors have now their worst behind them? Not necessarily. What is still missing is a signal for a trend reversal in the charts. One should wait for this to occur as catching a falling knife can be very painful.

20141216 sector sentiment dec engl

Background

sentix Sector sentiment is a monthly survey being conducted since 2002 among individual and institutional investors via the internet. The survey is – since October – run around the second Friday of each month. Investors are asked about their six-month expectations regarding 19 European stocks sectors. They can indicate whether they expect a sector to outperform, to perform as the market or to underperform. The survey results are normalised over all sectors and calculated as so-called z-scores. Z-Scores are standard deviations from the mean of a given sample. A value of +1 for a sector sentiment then means, for instance, that the expectations for the sector stand one standard deviation above the mean expectation for all sectors.

The current sentix Sector Sentiment survey was conducted from December 11 to December 13, 2014. 931 individual and institutional investors took part in it.

We use cookies and third-party services that store information in the end device of a site visitor or retrieve it there. We then process the information further. This all helps us to provide you with our basic services (user account), to save the language selection, to optimally design our website and to continuously improve it. We need your consent for the storage, retrieval and processing. You can revoke your consent at any time by deleting the cookies from this website in your browser. Your consent is thereby revoked. You can find further information in our privacy policy. To find out more about the cookies we use and how to delete them, see our privacy policy.

I accept cookies from this site.

EU Cookie Directive Module Information