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The Accumulator: oil's woes show no signs of slowing

Global markets continue to struggle as oil prices hit a near 12-year low. Our Accumulator data table reveals all.

 

by Sam Antrobus on Jan 15, 2016 at 17:12

The Accumulator: oil's woes show no signs of slowing

A horror start to the year for oil prices worsened this week, with the subdued crude price accelerating into freefall.

Oil fell 16% in the five days to yesterday, as our exclusive Accumulator data table shows. In dipping below the $30 a barrel mark for two consecutive days, the price of Brent crude reached its lowest level since 2004.

With oil now down 21.8% for the year so far, global markets have taken a further hit, adding to their losses for 2016. Barring the S&P 500 and India’s CNX Nifty, all the major global indices are in the red, with oil-reliant Russia experiencing a particularly tough time over the past week. The MCSI Russian Index was down 5.5%, while the FTSE 100 fell 0.6% in the week to yesterday, and has fallen even further today.

China did not endure quite the brutal sell-off of last week, with the Shanghai Composite dropping 2.5% in the five days to yesterday. And there were some signs that the state of the Chinese economy was not quite as bad as the most bearish commentators had painted.

But while trade data from the world's fastest-growing economy this week wasn't as bad as expected, the Shanghai Composite entered bear market territory today, with a 3.5% fall taking losses since December's high to 21%.

It has been another uninspiring week for the pound, as it suffered losses against the dollar, yen and euro. Hitting a new five-and-a-half year low against the dollar, poor British industrial output data has not helped sterling’s cause, raising further questions about the strength of the UK’s economic recovery.

While inflation lingers just above zero, the looming referendum on the UK’s membership of the European Union has also continued to weigh down on the pound.

It is not just US shares that are outperforming the rest of the world, with US treasuries also leading the way in fixed income. While this only marginally edged out eurozone government debt, which increased by 1.4%, gilts performed more sluggishly, rising by a mere 0.6%.

4 comments so far. Why not have your say?

Hotrod

Jan 16, 2016 at 11:49

I take on-board recent developments in the global economy and fully understand what the consequences will be at a macro-economic level, but I don't understand why share prices have dropped so dramatically in all sectors of the market.

In the real world nothing has changed. Needs and aspirations remain the same. Therefore as I see it. The devaluation of the Chinese currency and cheaper crude oil will help not hinder those countries which are heavily dependent on imports such as the UK. Surely; energy, imported manufactured goods, transport costs etc will be less.

Demand in the UK continues to rise due to the influx of immigrants, govt. policies, and recent flood damage.

Investors in commodities and exports should be worried, but why the big sell off in everything else. What's the panic?

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JohnR

Jan 16, 2016 at 16:54

In the "real world" (TM) everything has been more or less flat-lining for a number of years. Wage slavery has become endemic. Everyone is tapped out on debt or struggling to keep their heads above water, except the relatively wealthy who don't spend back into the economy what they take out anyway, that's why they're wealthy.

In the other world, the wonderland, the money laundering capital city bubble, the corrupt, interchangeable government, banking and tax dodging corporate world, the zero cost debt fuelled, financially engineered and inflated speculative bonanza world, things couldn't have been going better, all supported by ever expanding polituro dictat and balance sheets.

Saying there is a recovery and seeing a recovery are evidently not the same things though. So perhaps it's the realisation, perhaps that's what has changed.

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Hotrod

Jan 16, 2016 at 20:38

@JohnR

What a terribly depressing, pathetic, view of life you have! I can assure you that I am surrounded by vibrant, imaginative, entrepreneurs, brimming with confidence, who are all making something of their lives albeit in restricted circumstances.

Unfortunately I was born too soon and can no longer join them. Still, I'm not complaining. I took my chances when I saw opportunities when younger, which now allows me to live debt free in old age.

I suggest you get out more.

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sgjhaghsdg

Jan 17, 2016 at 13:13

I've got a team spread across four continents, and in every country there is *very* strong competition for skilled employees, even fresh graduates. The unskilled will struggle, but I'm not aware of any point in history where this hasn't been the case. Education is key.

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