Market mood brightens after torrid week

Markets appear to have found their feet after a week that saw the price of oil plunge to a 12-year low.

16-1-14-traders-634
Markets breathed a sigh of relief

Markets appeared to find their feet again this week after stomach-churning falls in the first five trading days of 2016. Bears including RBS and former US Treasury Secretary Lawrence Summers continued to fret over the world economy's prospects, but by mid-week, US shares were on the rise for a third successive day, while emerging-market shares had posted their biggest jump in three weeks.

Oil was again the biggest talking point as it plunged to a new 12-year low around $30 a barrel before recovering slightly. It has lost almost a fifth this year, and 70% in 18 months.

What the commentators said

"It would take an unusual series of supply disruptions to change the course of this price behaviour," said Citigroup's Ed Morse. Demand remains sluggish, Iranian oil is set to re-enter markets, and Saudi Arabia shows no sign of ditching its strategy of trying to drown US shale producers. Stockpiles continue to grow after a year in which inventories probably expanded by 1.4 million barrels.

Here's the most important thing for investors, said Nils Pratley in The Guardian: according to an industry insider, if the price averages sub-$40 this year, "dividends are toast at all major producers". And if this scenario stretches into 2017, "there will be budget crises in Russia and a fair number of Gulf states".

Recommended

The world’s fund managers are getting very bullish – be careful out there
Stockmarkets

The world’s fund managers are getting very bullish – be careful out there

The latest survey of fund managers shows them to be extremely bullish on all the same things. And that, says John Stepek, means the market is in dange…
21 Jan 2021
Five online retail stocks to diversify your portfolio with
Share tips

Five online retail stocks to diversify your portfolio with

Professional investor Tancredi Cordero, founder and CEO of Kuros Associates, selects five of his favourite online retail stocks to buy now.
18 Jan 2021
Why investment forecasting is futile
Investment gurus

Why investment forecasting is futile

Every year events prove that forecasting is futile and 2020 was no exception, says Bill Miller, chairman and chief investment officer of Miller Value …
18 Jan 2021
Why investors should beware of India’s surging stockmarket
Emerging markets

Why investors should beware of India’s surging stockmarket

The BSE Sensex benchmark index has soared by 90% since March, largely driven by foreign investors. But India's bull market is very vulnerable.
15 Jan 2021

Most Popular

Why we won’t see a house-price crash in 2021
House prices

Why we won’t see a house-price crash in 2021

Lockdown sent house prices berserk as cooped up home-workers fled for bigger properties in the country. And while they won’t rise quite as much this y…
18 Jan 2021
Prepare for the end of the epic bubble in US stocks
US stockmarkets

Prepare for the end of the epic bubble in US stocks

US stocks are as expensive as they’ve ever been. How can you prepare your portfolio for a bubble bursting?
18 Jan 2021
The best investment trusts to buy for 2021
Investment trusts

The best investment trusts to buy for 2021

Sectors ranging from emerging markets to student accommodation look poised to do well this year, says David Stevenson, as he picks the best investment…
19 Jan 2021