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I heard that if the price of oil is low that means the stock market is not doing well. Is this correct?

Investing, Stocks
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July 2017

That's a great question. Although the price of oil (and other commodities) has often been viewed as an indicator of economic strength, when prices were high, or weakness, when prices were low, that is not always the case. Low oil prices benefit consumers who in turn may spend more on goods and services, consumer discretionary stocks tend to do well in this envirnment. In addition, airlines, shipping and freight companies,  automobiles, and even consumer staples tend to do well in a low oil price environment. So in summary, low oil prices don't always indicate a slowing domestic or world economy as there may be other factors invloved, as there is today, such as oversupply that is driving oil prices down.

 

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