Why the rise in oil prices could cause the stock market to collapse

According to a Wall Street analyst, some stock markets may have increased side effects in early September as they knock on the door to a recession.

In a note on Sunday, BTIG’s core asset and outcomes strategist Julian Emmanuel looked ahead to the month-long West Texas Medium Cluster CL00, averaging a 24-month moving average.
+ 0.06%.
When the price is above 57% of the 24-month moving average, the highest 5% observations occur before the recession (see table below).


That 57% threshold is now $ 82 per barrel – this level is the November WTI Future CLX21,
+ 0.13%
It closed at the top on Friday when it reached a height of about 14 years. WTI rose to prominence as his bold performance combined.

“The strength of such an oil price may contribute to a different nature [the S&P 500] With 9/2 heights, higher revenue estimates, more foggy Fed and mixed population flows, ”wrote Emmanuel.

S&P 500 SPX,
+ 0.34%
It closed at a record 4,536.95 in September. 2. The large-cap fell to 5.2% in September and retreated to October 2, the S&P 500, which is 1.5% higher than the one that closed on Friday. Dow Jones Industrial Average DJI,
It completed less than 1% of the 35,625.40 closing on Friday, August 16.

As of Friday, the S&P 500 was up 19% to date, while the downtrend was up more than 15%. Little Cap Russell 2000 RUT,
+ 0.10%
On Friday, March 15, it recorded a low of 4% from 2,360.17 to 14% this year.

He noted that the recent slowdown in oil prices “has also led to a slowdown in equity markets, despite the low-cap performance in the medium term.” .


WTI crude has so far collected 68% this year, Brent Raw BRN00,
International standard, increased by 72%. WTI contract to be traded and released soon: This is the first time since April 2020 that the global economy has stalled due to the COVID-19 pandemic.

When the world economy came to life, the raw material was harvested. In the recent Gulf of Mexico, long-term supply cuts and oil exporters’ organizations and partners have been struggling to meet increased production quotas.

Meanwhile, concerns about rising oil prices, particularly for oil-sensitive sectors, have emerged. Delta Airlines DAL,
+ 0.05%
He said last week’s rise in oil prices would put pressure on its ability to remain profitable in the fourth quarter.

Renaissance macro research analysts said last week that poverty prices were routinely returned to the S&P 500, but that the sectors most vulnerable to rising energy prices had not yet met the historic target. Data.


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