OIL AT US$70 PER BARREL, DOW JONES ABOVE 52,000, NIKKEI ABOVE 70,000

 

Things are looking good around the world. (But not here). Here are some vitals signs from around the world. The Dow Jones has moved comfortably past 52,000. The Dow was tiptoeing just below and just above 52,000. But the past few days it has moved decisively past 52,000. Base case projections say the Dow Jones can pass 56,000 by year end. Considering the Dow was at 47,000 just four months ago this is not impossible. Or even higher if there is a settlement in Ukraine. (Most likely will be).  If there is regime change in Iran the Dow Jones can move beyond 60,000. 

The Nikkei also crossed the psychological 70,000 a few days back and it looks like the movement will stay. And right now (9 am KL time 1/7/26) the Nikkei is at 71,698.36, up 2.34% or +1,636.04 points from last close.

There is considerable downward pressure on oil prices. WTI hit US$70 per barrel yesterday - the past few days it has been tiptoeing between above and below US$70.

There are still 1,200 oil tankers queuing up to be moved out of the Straits of Hormuz. Of a certainty they are being moved out and plenty of oil will reach the markets. Some say US$70 plus or minus will stay, but that will be topside.  If there is an agreement over Ukraine, oil prices may dip further. Indications are that Ukraine will see a resolution hopefully by the end of this year.

Here is a prediction for the Ukraine situation:

Outcome by end-2026	Probability
Durable ceasefire/freezing of front lines	60–70%
Formal peace treaty	25–35%
Continued high-intensity war	30–40%

This is good news.

There will be considerable rebuilding in Ukraine. The Russian and Chinese economies will likely benefit the most. 

What about the bearded monkeys? They will still be fighting over bananas. 

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.