After experiencing a brief glimmer of hope due to OPEC announcing production cuts, the oil market has yet again been weighed down by a variety of factors, including a weakened stock market and Trump's tweet about how Saudi Arabia should not cut oil production.The US benchmark for oil plummeted to below $60 a barrel on Monday, down a whoppin...
Despite the bump after last week's US midterm elections, this week the S&P 500 (.INX) has fallen over 3% from 2,800 to the 2,700 level. While President Trump has blamed the slump on the Democratic Party's threats to investigate his tax returns and other potential scandals, market analysts blame a strong dollar, oil bear market, and the tech sector.
The US dollar (USD) rose to its highest level in 16 months as investors fear uncertainty surrounding the UK's Brexit deal with the EU. The Federal Reserve has not helped, sticking to its schedule of gradual rate hikes even as Trump repeatedly criticizes Chair Jerome Powell for his hawkish monetary policy. The market expects another rate hike in December. While a stronger dollar is good for tourists and companies that import, it hurts American companies that export and sell in foreign countries. Firms in the S&P 500 earn 44 percent of their sales outside the US, especially in the tech, energy, and industrials sectors. A strong dollar makes American goods and services more expensive to buy overseas, so less demand means worse sales and market share.
Surprisingly, oil has also entered a bear market. West Texas Intermediate crude oil fell for twelve straight trading sessions to $55.69 a barrel. Five factors are behind the oil bear market. First, there is oversupply in the market from OPEC's increased September production b...
