mardi 24 mars 2015
The Energy Bust: How Much Like Tech in 2001?
Posted on 00:51 by nice news
The drop in oil prices over the last six months has already produced the swiftest drop in the number of U.S. oil rigs in the ground, according to an analysis by Goldman Sachs.
Given the potential for a pullback from one sector to spill into others, economists at Wells Fargo explored in a recent research note whether the collapse in oil prices might, like the collapse in technology stocks 15 years ago, prove a harbinger of a downturn in the U.S. economy later this year.
Their answer: Not really.
The tech sector at the height of the 2000 stock bubble was around three times as important to the U.S. job market as energy is today, wrote Jay Bryson, an economist at Wells Fargo.
Capital expenditures for the tech sector, meanwhile, rose to 25% of total business investment in 2000 from 20% in 1995 before falling 17% over 2001 and 2002. Energy investment in 2013, by contrast, rose to around 6% of total business spending from 2% one decade earlier, Wells Fargo said in its note.
What about the potential for shocks on financial markets? Here, too, the energy blow looks likely to be significantly smaller than for tech. The Nasdaq index enjoyed a seven-fold increase between 1995 and 2000, Wells Fargo said. Energy stocks, by contrast, gained 144% in the five year period ended last June—an increase that actually lagged the S&P 500 index.
The energy sector, meanwhile, account
Given the potential for a pullback from one sector to spill into others, economists at Wells Fargo explored in a recent research note whether the collapse in oil prices might, like the collapse in technology stocks 15 years ago, prove a harbinger of a downturn in the U.S. economy later this year.
Their answer: Not really.
The tech sector at the height of the 2000 stock bubble was around three times as important to the U.S. job market as energy is today, wrote Jay Bryson, an economist at Wells Fargo.
Capital expenditures for the tech sector, meanwhile, rose to 25% of total business investment in 2000 from 20% in 1995 before falling 17% over 2001 and 2002. Energy investment in 2013, by contrast, rose to around 6% of total business spending from 2% one decade earlier, Wells Fargo said in its note.
What about the potential for shocks on financial markets? Here, too, the energy blow looks likely to be significantly smaller than for tech. The Nasdaq index enjoyed a seven-fold increase between 1995 and 2000, Wells Fargo said. Energy stocks, by contrast, gained 144% in the five year period ended last June—an increase that actually lagged the S&P 500 index.
The energy sector, meanwhile, account
The Energy Bust: How Much Like Tech in 2001?
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