Research: Oil risks, equity market drivers 2020

Research: Oil risks, equity market drivers 2020

By Blu Putnam, Chief Economist & Erik Norland, Senior Economist, CME Group

Oil: Is Mideast risk premium too low?

  • Oil prices surged but fell back after two recent Mideast incidents
  • Risk premium much lower than $15-$20 before shale oil revolution
  • Could dwindling capital expenditure lead to decline in US output?
  • Probability of big market moves in 2020 higher than in 2018, 2019
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After record 2019, what will drive equities in 2020?

  • Rate cuts, easing of US-China tension rallied equities in 2019
  • Earnings growth was slow, will likely grow modestly in 2020
  • Rate cuts in 2020 could signal concerns over slowing growth
  • Still too early to write off another good year in equities
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