What to Watch: Macro Movers

The first half of the year had surprises for just about everyone. The stock market was weak, corporate profits were better than expected, oil remained robust, job growth was anemic, long interest rates continued to perplex.

What might the second half of 2005 hold in store for investors? Barring some new unforeseen crisis, these issues will continue to drive the economy as well as the financial markets.

Energy and Oil

Crude hit a record in the last week of June, closing (briefly) over $60 a barrel. Back when it was under $40, most economists would have told you that $60 oil would grind global growth to a halt. While there's little doubt that oil is having an impact, it's been more far muted than many had expected.

From a market perspective, the influence has been more pronounced. Trying to correlate the day-to-day gyrations of equity prices with crude has been a fool's errand. But consider the first four months of the year: Crude busted out over $50 in February, and has (mostly) been higher ever since; it's not hard to imagine that the stock market's lousy first half was somehow related. ...