Australian Investment Blog

Oil has led equities down, can they bounce with it?

Oil has had an enormous 50% fall in only 7 months, and in recent weeks, this plunge has been broadcast as the reason for the accelerated selloff in equities (basically I believe this is total rubbish). Markets have become too optimistic over the recent strength in the US economy and ignored the rest of the world. If the whole world was booming, then we simply would not have enormous stimulus being pumped into the system by central banks and the fall in oil may only have been 20%. We should always remember, prices are determined by both supply and demand with oil obviously suffering from both directions. I find the below fact both scary and irresponsible: