Markets oil stocks

Here’s How Far Oil Prices Have To Rise To Hurt The S&P 500, According To History

We've got a ways to go yet, based on historical correlation anyway.

We've got a ways to go yet, based on historical correlation anyway.
This content has been archived. Log in or Subscribe for full access to thousands of archived articles.

3 comments on “Here’s How Far Oil Prices Have To Rise To Hurt The S&P 500, According To History

  1. I think it’s more than just ‘elevated geopolitical risk’. If Mr. Bone Saw is willing to chop up a US resident in an embassy of a NATO country while his fiance stands outside because he was saying mean things than there is zero percent chance that he is not going to be striking back at Iran in a big way for blowing up his Aramco IPO. Just a matter of when.

  2. I think your analyst is making an error….. he is doing 1st level thinking here. A 12% rise in oil prices is a significant hit to developing asia outside of perhaps indonesia and vietnam. China and Japan really take a whack as well. The second and third order effects here are probably significant if oil risk premiums persist. The geopolitical ramifications are serious. I don’t see how Kolanovic would conclude that this leads to a higher likelihood of a trade deal with China either. It might, but I don’t see what basis he would have for coming to that conclusion. It could just as easily force both leaders to play to their nationalistic hardline political bases.

  3. The domestic US relationship with oil prices has changed greatly in the past decade. As the largest producer and largest exporter, the US now benefits from high oil prices as much as it suffers.

    Beneficiaries of high prices are TX, OK, E&P, HY issuers and holders, etc. Sufferers are drivers, transport, and a broad but diffuse impact on “the consumer”.

    I think that as a practical matter, oil prices are no longer a major driving factor for the US economy overall unless the price gets extreme. $30 is extreme, $130 too. But a move from $50 to $80 and back to $50, while interesting for energy stocks, isn’t a big deal overall.

    Ria’s point, that rising oil prices still have clearly negative impacts on other countries, bears watching.

    It has been a long time since you could watch falling (rising) oil prices and expect tradable positive (negative) impacts on, say, retail stocks.

Leave a Reply to Caribbean Breeze Cancel reply

Skip to toolbar