OIL CORRELATIONS & GLOBAL SELL OFF 2016??
First post on this forums, I am a finance student.
Regardless, the current global sell off is continueing amid fears in china and lowering oil prices causing speculation.
What I don't understand is, the lowering of oil prices should benefit many of the companies in the s&p 500, especially because travel costs and the lot will be lower come the 1st Q. Also the dollar is strengthening, so this would mean higher purchasing power for companies such as apple, walmart.
Why then is this global sell off continueing, I have an account with my broker with funds x > 10k euros. I have positions in APPL, WMT. I am long in these positions, but they keep falling. I am not having worries because in the long run the stocks will rise. However my question is:
"Why is the stocks continueing to fall for exp APPL, if their outlook should be better (stronger dollar, lower oil prices)" - Why the global sell off and increase in supply for these large bluechip stocks?
I wish I had waited longer to jump in at a lower position (lower P/E) but I have am disappointed.
Can someone explain please.
My suggestion would be to sell your positions and sit on cash. Why? because you clearly don't understand investing. Perhaps because you are still a student. But right now, you shouldn't be in the game yet.
Here is a list of inaccurate statements mentioned in your post: 1- Lowering oil price should benefit a lot of companies. Perhaps not the ones you mentioned 2- Even for the ones that benefit, they don't simply benefit because of lower travelling costs, that cost is negligible. 3- Dollar strengthening is BAD for apple!! Google currency translation effects 4- In the long run stocks can rise and likely can fall. History is no indication of future. All depends on your time horizon, which could be not long enough. Depends also on your stock selection as your companies might go bust. 5- Jumping on a lower P/E might not necessarily mean it is better. Could simply mean you are buying when sh*t blowing up more. Lehman had a lower P/B in early sept 2008 vs. 2007.
You are missing the whole point here. The driver is Chinese economy slowing down -> China Demand weaker -> EM Demand weaker -> Lower demand for Oil (while supply stays high) -> Lower oil price & Stocks doing badly because of low demand from EM and bearish sentiments around.
the bearish sentiment part i understand that it can impact most stock markets
but could you please elaborate on why stocks in the west would fall due to low demand from EM
and i agree with your suggestion for Klossie
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