As the price of Oil continues its decline, the equity markets continue to grapple with the effect that this will have on corporate earnings for the broad markets. As a recent Bloomberg article (CLICK HERE) points out the answer is not clear. Although consumers and manufactures will definitely benefit from lower prices, energy companies will not. Consensus seems to be centered around a long term positive impact to the overall economy but as with most economic matters, that opinions is certainly not unanimous.
Archive for December, 2014
U.S. Stock markets dropped significantly on Friday as investors tried to assess what effect dropping oil prices and slow growth in Europe will have on the economy and if now is the right time to take profits for what is turning out to be a fairly strong fourth quarter. Although lower oil prices will certainly affect oil stocks, many argue that the broad benefits to the overall economy far outweigh the negative effects to the oil industry. As this article states, many analyst believe that falling oil prices will have a positive impact on consumer spending, a huge driver to domestic GDP. For a complete transcript of the Los Angeles Times article please CLICK HERE.
Today’s online edition of the Los Angeles Times reported significant US job growth for the month of November, exceeding analyst expectations by over 100,000 jobs. In addition to strong job growth, the article also reported an increase in earnings–a welcome sign for many who have not seen wage growth for quite some time. For a full transcript of the article, please visit the Los Angeles Times’ online site by clicking HERE.