Oil Slump


Stocks and Oil continues to slide
United States: Consumer confidence hits a 10 year high
Eurozone: Weak start to Q4 activity data
The Week ahead: All about the Fed

Good morning,

Although much has been made of the windfall from the decline in the price of oil to consumers (outside the oil producing countries that is), the gains from those declines will be somewhat hurt by the fall in global stocks over the last week. The reason is simple; the markets now sense that the fall in oil is the result of the slump in growth prospects and as a result is a leading indicator for equities via subdued earnings.

This takes us back to the “who has been right all along” question – the bond or equity markets?

Last week, the FTSE MIB was the weakest performer for the week with a whopping 7.4% decline. This was the largest weekly decline since November 25, 2011. The French CAC performed nearly as poorly, falling by 7.03% (lowest since September 23rd 2011) while the Euro Stoxx Index fell 6.41% (largest weekly drop since August 5, 2011 ).

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Global Macro-Daily Note 15th December 2014


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