One notable aspect of the financial markets is the continuing sharp drop in crude oil prices. Other commodities have also been under selling pressure. I view these declines, as well as other aspects of the overall financial system, to be manifestations of “deflationary pressures,” of which I have extensively written.
As discussed by the Wall Street Journal article of yesterday (January 12, 2016), titled “U.S. Oil Settles Above $30 a Barrel, After Dipping Below for First Time Since 2003“:
Big oil companies deepened their cutbacks to staff and investment Tuesday, as the price of oil briefly slipped below $30 a barrel for the first time since December 2003.
For reference purposes, here is a chart of (spot) Light Crude Oil, from the year 2000 to yesterday’s closing price, depicted on a weekly basis using a LOG scale, with price labels:
(click on chart to enlarge image)(chart courtesy of StockCharts.com; chart creation and annotation by the author)
The Special Note summarizes my overall thoughts about our economic situation
SPX at 1946.41 as this post is written