Economic Commentary
Nosediving crude prices were front and centre again yesterday, with a drop of more than 5% during the trading day. WTI is currently trading below U.S. $45/barrel, at its lowest level since March 2009. Although this major decline in prices is beneficial for consumers, stock markets are far less positive about it, as plunging energy prices could destabilize producing countries or sectors that previously benefited from high prices.
• U.S. companies have begun earnings season for the final quarter of 2014. Close to 60% of S&P 500 companies will release earnings data in January. Late yesterday afternoon, Alcoa kicked off the festivities with encouraging results. If stock markets want to continue on their strong run from 2014, they will certainly need positive financial results south of the border.
• Across the Atlantic, U.K. inflation numbers released early this morning disappointed analysts, with annualized price growth of 0.5%, or 0.2% below the forecast.
• Later this morning, the NFIB Small Business Optimism Index will be released in the U.S. Have a great day! Philippe Shebib
• Range of the day: 1.1925 – 1.2025 Range of the next 5 days: 1.1800-1.2200
