Crude and Stocks

The correlation between stocks and Crude Oil has been strong.

I think the correlation may be due to bank exposure to oil debt--The lower oil goes, the greater the probability of oil companies defaulting on their debt.    

While stocks have been moving higher lately, oil has moved lower. I think this price divergence is worth noting.  

There is no saying where oil goes from here, but if the prices continue to move lower, stocks may follow.   

Based on recent price data, I have a hard time believing in a reality where oil moves back down to $40 and stock indices stay strong. But, then again, anything can happen in markets.