The burning question for energy stocks

On a day in which crude oil fell to fresh lows, here's what S&P Global portfolio manager Erin Gibbs will be watching for.

1. Oil's slip

The oil decline continues. Amid fresh supply worries, crude oil futures fell to $42.05 per barrel on Wednesday, their lowest level since August of 2016. That decline sent the popular XLE energy sector ETF to its lowest level in more than a year.

"Despite promises of lowering production and inventory, we haven't seen those come to fruition," Gibbs pointed out Wednesday on CNBC's "Trading Nation." "I'm watching if the energy sector can remain stable despite oil dropping below 45 dollars."

The extent to which energy stocks can maintain their footing amidst a continued decline in oil prices is a key question going forward, in Gibbs' view.

2. Weekly jobless claims

With the economy at what many are calling full employment, Gibbs will closely watch the weekly jobless claims number that is set to be released on Thursday morning.

"We've seen upward claims revisions for the last three weeks," Gibbs observed. "I'll be looking to see if jobless claims are revised up yet again, and if there is continued upward trend in the four-week moving average."

3. Leading Indicators

The Leading Indicator index released by the Conference Board could show signs of increasing economic bloom.

"The Conference Board's Leading Economic Index increased both in April and March. Another increase for May might indicate that US GDP growth could recover for Q2 after a weak Q1," Gibbs said.

Recently, housing data and workweek hours have been "weak spots," she added.


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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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