The stock market sell off may just be an overdue correction. It may be triggered by the ebola scare or the government’s ineptitude, though that is nothing new.
It may be triggered by a slow down in China, weakness in Europe.
I may be at least partially caused by our own slow growth policies and the failure of endless stimulus to get us out of first gear.
The dollar is strengthening even though our interest rates are at record lows. This is unusual and may indicate that as weak as our economy is we are still the preferred source for investment.
While a collapsing global market hurts many domestic companies in global commerce it may also cause investment funds to come to our shore pushing both earnings multiples and share prices higher.
Lower oil prices certainly improve the spending power of Main Street and every lower income consumer and every small business running even a small fleet of trucks. It is a spending stimulus worth billions of dollars of tax cuts, but not if you are in the oil production business.
It also raises the relative costs and reduces the relative value of alternative energy sources. Lower oil prices are very bearish for Tesla Automotive.
How will the ebola scare affect the economy. Consumers may avoid air travel and malls. They may drive more wearing out tires quicker. They may accelerate online buying (AMAZON) even more than they were before. The sales of protective gloves and face masks on Amazon are soaring (Johnson and Johnson).
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