European shares are now down to their lowest since October 2014 following losses in U.S and Asian stock markets. Oil prices have dropped while the intraday gold prices occasionally jumped by 1.08%.
Very low prices of oil and diesel are weighing down on energy stocks, and the reason is debt. It is difficult to pay the interest expense on more than $353 billion worth of debt — the amount of long-term debt saddled on North American producers.
In the short term, the fall in oil is damaging to risky asset prices, as oil and stocks are positively correlated to expected profitable investments, in addition to continuing and sidewise businesses or non-profit organizations. Consumer savings and spending on the other hand make for a slower path to economic growth.
The global wealth distribution might be shifting direction with the 1% of the U.S. annual budget becoming more significant, also in light of pharmaceutical and biotech research advancements. Further to 2016 markets perspective is the Chinese yuan that is included in the international basket of reserve currencies.
Should the U.S. consider more left-wing social actions to boost overall consumption figures? It is already the advanced and aware society with excellence in overcoming difficulties across all industries. Further to this awareness, the government might unusually provide state-based social monthly payments to most citizens, in addition to payments by companies, families and organizations.