Every conversation I’ve had today with people from Nashville to Toronto has started with how cold it is outside. After the shock of the cold and when the heating bills come due, the conversation may turn to how expensive heat was in January. That, of course, is at least for those who don’t invest in commodities to offset price spikes.
After natural gas posted the biggest one-day gain of 9.2% on Jan 24, 2014 since June 14, 2012, the S&P GSCI Natural Gas has gained 19.3% this year. It has gained 25.9% in just 10 days since Jan. 9, 2014 and is also up 44.6% since it’s low for the prior year on Nov. 4, 2013.
In the history of the index since Jan 8, 1994, it has been calculated on 5,053 days and only 39 of 5,053 days have had a higher gain than the 9.2% seen on Friday – that is only 0.77% of days. That puts Friday’s gain in the top 1% of big daily gains for the natural gas index. See the table below for days gaining more than 9.2%:
Source: S&P Dow Jones Indices. Data from Jan 1994 to Jan 2014. Past performance is not an indication of future results. This chart reflects hypothetical historical performance. Please see the Performance Disclosure at the end of this document for more information regarding the inherent limitations associated with backtested performance.
Also, January 2014 MTD has posted the biggest monthly gain since September 2009. Only 17 months of the 240 in the history of the index have seen bigger gains than 19.3%. Although natural gas can be considered in a bull market from the bottom, many will watch to see if natural gas will earn the bull market stamp in January by breaking break the mark of a 20% gain for the month. Please see below for the table of natural gas bull market months:
Source: S&P Dow Jones Indices. Data from Jan 1994 to Jan 2014. Past performance is not an indication of future results. This chart reflects hypothetical historical performance. Please see the Performance Disclosure at the end of this document for more information regarding the inherent limitations associated with backtested performance.
Last, below is a chart of the index, where you can see the level is highest since Jan. 29, 2010.
Source: S&P Dow Jones Indices. Data from Jan 1994 to Jan 2014. Past performance is not an indication of future results. This chart reflects hypothetical historical performance. Please see the Performance Disclosure at the end of this document for more information regarding the inherent limitations associated with backtested performance.
About Jodie Gunzberg
Jodie M. Gunzberg is vice president at S&P Dow Jones Indices. Jodie is responsible for the product management of S&P DJI Commodity Indices, which include the S&P GSCI® and DJ-UBS Commodities Index, the most widely recognized commodity benchmarks in the world. Both indices represent the global commodity market and are most commonly used for the historical benefits of inflation protection and diversification to stocks and bonds.
© S&P Dow Jones Indices LLC 2013. Indexology® is a trademark of S&P Dow Jones Indices LLC (SPDJI). S&P® is a trademark of Standard & Poor’s Financial Services LLC and Dow Jones® is a trademark of Dow Jones Trademark Holdings LLC, and those marks have been licensed to SPDJI. This material is reproduced with the prior written consent of SPDJI. For more information on SPDJI, visit http://www.spdji.com.