Is Oil Pushing Down The Economy, Or The Other Way Around? 

Conventional wisdom has long held that when oil prices drop, consumers experience an increase in discretionary income while corporations experience a boost in profit margins. At the same time, companies in the consumer discretionary sector get a boost in sales volume as consumers spend more on discretionary items.The logical conclusion of this scenario would be record gains in the stock market as investors anticipate strong corporate profits. However, those expectations were largely shaped by past supply shocks – mostly on the negative side – and recent stock market performance suggests that we are now dealing with an entirely different dynamic.

Source: Is Oil Pushing Down The Economy, Or The Other Way Around? | OilPrice.com

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