Buckle Up for the Oil Price Roller Coaster Ride
- Brent crude oil, the international benchmark, and West Texas Intermediate (WTI) fell below $45 per barrel during the week amid renewed angst about persistent oversupply. Since the beginning of the year, prices are down more than 20 percent. If sustained, the drop in oil prices present s downside risks to our business fixed investment f orecast in the coming quarters.
- Following the sluggish reading in housing starts and permits, existing home sales rebounded in May, with median home prices edging higher relative to a year earlier.
- The Leading Economic Index climbed higher in May suggesting continued gains in U.S. economic activity.
Stable as It Goes
- The next best thing to a strong improvement in economic activity is sustainable, but relatively weak economic growth. This is what seems to be happening across the global economy. Wells Fargo's expectation is for global growth to improve a bit this year but remain slightly below the historical average.
- This week we saw Taiwan’s exports orders post a notable 9.1 percent increase compared to a consensus for ecast of a 7.5 percent improvement, year over year. We have also seen an improvement in export and import growth in the Chinese economy, which tends to indicate that China is doing its part in generating stronger economic activity across the globe.