Oil at $55.. Is it a "gift" to the Federal Reserve or a "bad omen" for the economy?

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Some see the decline in oil prices as good news at the gas stations, but the experienced investor sees the bigger picture:
Oil is not just a commodity; it is a "thermometer" measuring the heat of the global economy.

And when the thermometer suddenly drops to its lowest levels in 5 years, it means that the (global economy) is suffering from "cooling" in growth.

The attached chart shows West Texas Intermediate breaking psychological support barriers to reach $55.

What does this chart whisper to us?
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The sound of recession is rising:
Oil is a non-lie commodity.
A sharp price decline indicates that global demand (especially from factories in Asia) is slowing down sharply.
The market is pricing in "abundance of supply" versus "scarcity of demand."
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The death of inflation:
This is the only bright side.

The collapse of energy prices is the final nail in the coffin of inflation.

This gives central banks (and the Federal Reserve in particular) the green light to cut interest rates aggressively without fear of prices rising again.
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Redistribution of wealth in stocks:
In markets, one person's misfortune is another's gain.

Energy and oil companies will face enormous pressure on their profit margins.

But on the other hand, the aviation, transportation, and manufacturing sectors, which have been suffering under high fuel costs,

will now receive a "free check" to increase their profits thanks to lower operating costs.
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Investor takeaway:
We are facing a double-edged sword.

The decline in oil solves the inflation problem, but it may create a "deflation" and recession problem.

Do not try to catch the falling knife in energy stocks now until the price establishes a true bottom. Instead, look for companies whose balance sheets will benefit from cheap energy.

Economic crises do not disappear; they just change shape...

From "rising prices" to "slowing growth."

Share your opinion with me..
Do you expect "OPEC+" to intervene to save prices, or are market forces stronger this time?

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