by Michael Haltman
The pundits on TV have all glommed onto the common argument that declining crude oil is responsible for declining stock prices!
I, however, am of the opinion that declining crude coupled with the overall decline in the CRB, are merely symptomatic of a greater potential problem.
That is the real possibility for the US economy to dip into recession leading to lower corporate earnings meaning that stock prices are currently overvalued (Commercial Real Estate: Is The ‘Smart Money’ A Buyer Or A Seller?‘). Perhaps investors are now coming to that realization.
Add to the mix that the Fed has now tightened ‘in the face of a still struggling U.S. economy, turmoil in emerging markets, angst in the high yield bond market and inflation that remains below the Fed target‘ (Source).
What this recipe what you get is the possibility for 2016 to be a difficult year!
One-Year CRB Index Chart
One-Year Crude Oil Chart
One-Year S&P 500 Chart
Michael Haltman is President of Hallmark Abstract Service in New York. He can be reached at [email protected].
