You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
How long will the markets ignore oil?
- Thread starter reno4nook
- Start date
To be honest, I don't know.
But rates are more important than oil. With high oil and low rates, you'd still experience robust growth.
Now, with high oil and high rates, you've got a problem.
Right now, we're at the mid point. Rates are going up and the fed is going to pop this bubble its made - just like it always does.
The real inflationary problem was the low rates (or huge money supply), starting in 2001-2002. High energy costs just added fuel to the fire (excuse the pun).
What can the Fed do now? Validate this near-rampant, double whammy inflation (money supply and energy) with lower rates and vaporize what little savings the American public has?
The Feds only got one way to move. Up.
But rates are more important than oil. With high oil and low rates, you'd still experience robust growth.
Now, with high oil and high rates, you've got a problem.
Right now, we're at the mid point. Rates are going up and the fed is going to pop this bubble its made - just like it always does.
The real inflationary problem was the low rates (or huge money supply), starting in 2001-2002. High energy costs just added fuel to the fire (excuse the pun).
What can the Fed do now? Validate this near-rampant, double whammy inflation (money supply and energy) with lower rates and vaporize what little savings the American public has?
The Feds only got one way to move. Up.
Quote from iceman1:
hey---- Martin Zweig must be confused as hell by now --- what was his famous adage: "don't fight the Fed". Hell - oil is manipulated up to absurd levels and %rates have been rising for how many Qs ? Yet the markets keep shrugging it off.
don't look now but someone is going to yell TIMBER soon - the Q isn't whether --- but WHEN and from what level!
if you think he is confused check out his results each of the prior 5 years... you may be the one who is confused.
Watch for oil tomorrow. It should get exciting.
www.cnn.com/2006/WORLD/meast/01/30/iran.nuclear.ap/index.html
www.cnn.com/2006/WORLD/meast/01/30/iran.nuclear.ap/index.html
Quote from reno4nook:
With oil now trading at $68.45..
how much longer can the markets ignore the high price of oil?
If I'm not mistaken, today's closing price was the 4th highest in history.
With the price up 19% in the past 5 weeks, you would figure the inflationary consequences would begin to factor into the market.
fwiw..maybe the financials have begun to notice.
shhhh! I 'm not short yet.
Oil only accts for 2% of the US economy, compared with 8% during 1970s.
Oil has had a positive correlation with the economy and stock market in the past few years.
Nothing to worry about :-I.
Oil has had a positive correlation with the economy and stock market in the past few years.
Nothing to worry about :-I.
As another said, why do you think the market is ignoring oil? Because it doesn't move in the opposite direction of the price of oil? That means nothing. There are a lot of reasons why the market should go higher. With a few notable exceptions, corporate earnings have exceeded expectations or been in line; few have missed. The slower growth in Q4 probably points to the end of constant interest rate increases by the Fed, so one less reason for money to move elsewhere. Housing and employment continue to defy the doomsdayers, showing recession is not just around the corner.
With these positive items, it may be that oil is being a drag on the market. Perhaps we'd be well over 1300 S&P500 now if oil were $60 a barrell.
NDG
With these positive items, it may be that oil is being a drag on the market. Perhaps we'd be well over 1300 S&P500 now if oil were $60 a barrell.
NDG