The main reason is that international oil prices plummeted as if they were flattening yesterday. The price of Brent crude oil fell from the opening price of US$113.5/barrel to the lowest of US$101.16/barrel, with the maximum drop of 10.87%.

Domestic refined oil prices are very likely to see two consecutive declines, and the current round of oil price cuts will be relatively large. No. 92 gasoline will fall below 9 yuan and return to around 8.5 yuan/liter.

The main reason is that international oil prices plummeted yesterday, as if they were flattening. The price of Brent crude oil fell from the opening price of 113.5 US dollars per barrel to the lowest of 101.16 US dollars per barrel, with the maximum drop of 10.87%. WTI The price of crude oil fell from the opening price of US$110.41/barrel to the lowest of US$97.81/barrel, with the largest drop of 11.41%.

The sudden drop in crude oil will make people mistakenly think that the two countries currently in armed conflict in the world have completed reconciliation. In fact, this is not the case. If we only focus on crude oil itself, we may not fully know the main reasons for the decline of crude oil. We should analyze the main reasons for its decline from a more comprehensive perspective.

Just yesterday, in addition to the sharp drop in international oil prices, the prices of gold, copper, natural gas, wheat, corn, cotton and other bulk commodities all fell to varying degrees.

New York gold fell from US$1,814.4/oz to US$1,763.8/oz yesterday, a drop of as much as 2.09%. In the past four months, the price of gold has fallen from the highest of US$2,078.8 per ounce to below the US$1,800 per ounce mark, a decrease of 15.15%.

London copper performed even more weakly, falling from US$7,997/ton to US$7,625/ton yesterday, a drop of as much as 4.33%. In the past four months, London copper's highest price of US$10,845/ton fell to yesterday's lowest of US$7,597/ton, a drop of 29.94%.

U.S. natural gas has fallen by nearly 1/3 in the past month, and cotton futures have plummeted by more than 40% in the past two months.

In addition to the decline in commodity prices, the foreign exchange market is also a bloody storm. Following the sharp depreciation of the yen, the euro has also followed suit. The Japanese yen has depreciated by more than 30% in the past 18 months, and the euro has hit a new low in 20 years, depreciating by more than 20% in the past 18 months!

Why did the international commodity and foreign exchange markets suddenly experience such huge fluctuations?

The main reason is that the United States is experiencing signs of economic recession. According to Bloomberg economic forecasts, consumer confidence in the United States has hit a record low in recent times. At the same time, interest rates in the United States are still soaring. In fact, the higher the interest rate level, the weaker consumer confidence in consumption will be, which will form a vicious circle and eventually cause an economic recession. The probability of a U.S. economic recession in the next 12 months has increased to 38%.

It should be noted that the surge in interest rates will significantly increase the capital utilization costs of enterprises. However, due to lack of consumer confidence, enterprises cannot offset these losses through price increases, which will also cause corporate profits to decline. After companies cannot make money, economic recession is inevitable.

What is a nominal recession?

It refers to a region’s GDP growth rate being negative for two consecutive quarters or longer. Taking the United States as an example, the GDP of the United States in the first quarter of 2022 was US$5.981 billion, a decrease of 1.6% on an annual basis. Reuters said that among economists interviewed, they believed that U.S. GDP would fall by about 1.5% year-on-year in the second quarter. If expert predictions are entirely correct, the U.S. economy will slip into a technical recession.

Regarding the current slowdown in the U.S. economy, Federal Reserve Chairman Powell said that the biggest risk currently encountered by the United States is continued inflation. Tightening monetary policy may cause an economic recession, but there is no guarantee that it will definitely happen.

What impact will the US economic recession have on us?

definitely has a good side and a bad side. The good side is that China, as the world's factory, can produce all kinds of daily necessities needed by the world in the lowest cost and most efficient way. It may have a leading role in international trade companies, but the premise is small profits but quick turnover. Because Americans are unwilling to consume, they can only occupy the market with highly cost-effective products.

For ordinary people, the most direct benefit may be the drop in oil prices. People can continue to use relatively low-priced gasoline, and the cost of using a car will decrease relatively. What is the bad side of

? It is also becoming more difficult for domestic companies to make money. To take the simplest example, the U.S. economic recession will cause corporate profits to decline, which may lead to layoffs. The more people are laid off, the weaker the U.S.'s consumption power will be. Some domestic mid-to-high-end products are easily unsalable, which in turn will have a certain impact on our economy.

In addition, chip prices may continue to rise, which will eventually make the cost of some domestic products continue to rise. However, domestic consumers are busy paying off their mortgages and do not have much funds to support the rising prices of domestic products, which will eventually affect the All walks of life.

In short, in the next few years, no matter what industry you are in, you must be prepared to "survive". The strategy of substantial expansion does not seem to be suitable!

This is the best of times and the worst of times. With the integration of capital thinking and innovative models, the whole world is your stage!

In the new business world, there are no eliminated industries, only eliminated products and outdated business models. In the future, all business competition will focus on product innovation and model innovation.

A company or a boss is destined to fail early if it lacks innovation capabilities. Please remember that without innovation, there is no imagination!