“How To Make Sense of Plummeting Global Markets (Irwin)”
This article gives an in-depth look at the macroeconomics of the world. Factors that determine the performance of the global economy like stock and bonds have had poor returns to investors from the start of the year 2016. These poor performances are an indication of harsh times like global recession, which shall be witnessed later in the year. So far, the damage had been experienced on global assets like the dollar index, Chinese stocks, and crude oil. The assets’ market price have taken a decreasing trajectory hence the plummeting global markets (Irwin n.p).
Narratives have a way of affecting the state of macroeconomic behavior. The article, “How Stories Drive the Stock Market (Shiller)” explains the story of how the global oil prices have reduced. The cause of the reduction in oil prices is due to improved technology which has increased the supply of petroleum in the world market thus reduced costs. Fracking is the new technology in the oil extraction process. Oil production has increased leading to an abundance of the commodity. Therefore, oil producing countries are forced to reduce their oil prices (Shiller n.p).
According to the article, “Stock Prices Sink in a Rising Ocean of Oil (Krauss),” the oil glut is becoming a barrier to the increase of global stocks. The increased supply of oil to the world market is creating anxiety to investors. Investors avoid cases of surplus supply which reduce market prices thus little income generated. The oil glut is as a result of increased production and reduced consumption of energy hogging nations like China. The surplus oil has led to the depression of stock markets globally (Krauss n.p).
Works Cited
Irwin, Neil. "How to Make Sense of Plummeting Global Markets." The New York Times. The New York Times, 20 Jan. 2016. Web. 25 Jan. 2016. http://www.nytimes.com/2016/01/21/upshot/how-to-make-sense-of-plummeting-global- markets.html?ref=economy.
Krauss, Clifford. "Stock Prices Sink in a Rising Ocean of Oil." The New York Times. The New York Times, 15 Jan. 2016. Web. 25 Jan. 2016. http://www.nytimes.com/2016/01/16/business/energy-environment/oil-prices-one- million-barrel-glut.html?ref=economy.
Shiller, Robert J. "How Stories Drive the Stock Market." The New York Times. The New York Times, 22 Jan. 2016. Web. 25 Jan. 2016. http://www.nytimes.com/2016/01/24/upshot/how-stories-drive-the-stock- market.html?ref=economy.
