Are slumping oil prices a harbinger of doom for the stockmarket? Albert Edwards of Société Générale notes that weak commodities often serve as “a leading indicator” for other asset prices. Crashing oil demand suggests that the global economy is heading for a deep recession. Shares, another “cyclical risk asset” prone to recessionary plunges, could soon follow black gold south.
Oil prices remain historically depressed. However, they enjoyed a strong start to the week, with US West Texas Intermediate, which turned negative last month, doubling over a week to trade above $23 a barrel and Brent rising through $29 a barrel to hit a three-week high.
The easing of lockdowns in many places means that demand is slowly returning for the world’s favourite commodity, says David Hodari in The Wall Street Journal. Goldman Sachs analysts report that consumption is up by 2.5 million barrels per day since the nadir of early April. Yet things are far from normal. America’s oil storage problem, which caused April’s price crash, is still with us, says Caroline Bain of Capital Economics. We are not “out of the woods yet”.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
“There is nothing like low prices to cure low prices,” says Stephen Innes of AxiCorp. Global oil supply has been shrinking rapidly in the wake of last month’s market drama. US oil and gas companies have closed 384 platforms in the past seven weeks alone. There are “nascent signs” that the market is rebalancing.
-
Should you invest in UK equities?The FTSE 100 hit a record high this week, but UK equities remain unloved and undervalued compared to their global and US peers. Should you snap them up at a discount?
-
State pension errors: DWP urged to check for mistakes among divorced peopleFormer pensions minister Steve Webb says there are a high number of divorced women on low state pensions. Now MPs want the DWP to check if there were any errors in “potentially underpaying men and women who are divorced”.
-
Halifax: House price slump continues as prices slide for the sixth consecutive monthUK house prices fell again in September as buyers returned, but the slowdown was not as fast as anticipated, latest Halifax data shows. Where are house prices falling the most?
-
Rents hit a record high - but is the opportunity for buy-to-let investors still strong?UK rent prices have hit a record high with the average hitting over £1,200 a month says Rightmove. Are there still opportunities in buy-to-let?
-
Pension savers turn to gold investmentsInvestors are racing to buy gold to protect their pensions from a stock market correction and high inflation, experts say
-
Where to find the best returns from student accommodationStudent accommodation can be a lucrative investment if you know where to look.
-
Best investing appsWe round up the best investing apps. Looking for an easy-to-use app to help you start investing, keep track of your portfolio or make trades on the go?
-
The world’s best bargain stocksSearching for bargain stocks with Alec Cutler of the Orbis Global Balanced Fund, who tells Andrew Van Sickle which sectors are being overlooked.
-
Revealed: the cheapest cities to own a home in BritainNew research reveals the cheapest cities to own a home, taking account of mortgage payments, utility bills and council tax
-
UK recession: How to protect your portfolioAs the UK recession is confirmed, we look at ways to protect your wealth.
