Stocks slump again as oil falls

Oil appears to have been the trigger for the latest bout of jitters in the stockmarkets, with the FTSE 100 now officially in a bear market .

"We are in an environment where fear feeds on fear," said Mads Pedersen of UBS. After appearing to find their feet early in the week, markets promptly had another panic attack. The FTSE All World index slid to a two-and-a-half-year low. The FTSE 100, now down 20% from its April record peak and thus officially in a bear market, is down to a three-year low. Oil appears to have been the trigger for the latest bout of jitters. It has slid to a 12-year low around $28 a barrel following a note from the International Energy Agency saying the market "could drown in oversupply" as Iranian crude returns. Fears about China were also a factor.

It's been a horrendous start to the year, but there could be more to come, reckoned Bank of America Merrill Lynch. Investors "are not yet max bearish", according to its monthly global fund manager survey. Just 12% think a global recession will occur in the next 12 months, for instance. So there is scope for plenty more investors to join the sell-off.

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Andrew Van Sickle
Editor, MoneyWeek

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.