CROSS-SECTORSECTOR COMMENT 16 JUNE 2015ANALYST CONTACTSBenjamin S. Garber 212-553-4732 Asst Dir-Economist benjamin.garber@moodys.comABOUT CAPITAL MARKETS RESEARCHAnalyses from Moodys Capital Markets Research, Inc. (CMR) focus on explaining signals from the credit and equity markets. The publications address whether market signals, in the opinion of the groups analysts, accurately reflect the risks and investment opportunities associated with issuers and sectors. CMR research thus complements the fundamentally-oriented research offered by Moodys Investors Service (MIS), the rating agency.CMR is part of Moodys Analytics, which is one of the two operating businesses of Moodys Corporation. Moodys Analytics (including CMR) is legally and organizationally separated from Moodys Investors Service and operates on an arms length basis from the ratings business. CMR does not provide investment advisory services or products.View the CMR FAQ Contact the CMR team Follow us on TwitterMoodys Analytics markets and distributes all Moodys Capital Markets Research, Inc. materials. Moodys Capital Markets Research, Inc. is a subsidiary of Moodys Corporation. Moodys Analytics does not provide investment advisory services or products. For further detail, please see the last page.Market CommentUpside to the Oil Price Plunge The deep decline in oil prices since the middle of last year has largely been a drain on the US economy and capital markets. Business investment has suffered amid the drop in commodity revenues, while effects of lower fuel costs have not greatly lifted other areas of consumer spending. The energy sector has been a drag on markets, weighing down equities and lifting corporate credit spreads. Yet very recent evidence points to a turnaround in consumer outlays, while investors eye opportunities among the more stable oil sector firms. Lower oil prices are now poised to provide a tailwind to the outlook after pulling down activity in recent months.MOODY'S ANALYTICS CROSS-SECTOR2 16 JUNE 2015 MARKET COMMENT : UPSIDE TO THE OIL PRICE PLUNGEConsumers finally cash in on cheaper fuel With domestic crude oil prices diving 60% peak-to-trough from June 2014 to March 2015, US consumers were supposed to cash in on cheaper gasoline in a big way. But the boon to retail sales has been slow to emerge (Figure 1). When seasonally adjusted sales at gasoline stores fell by $20 billion sequentially in the three months ending February, sales excluding autos and gasoline rose by a mere $5 billion. In the most recent quarterly period through May, gasoline store sales flattened out as core retail sales expanded by a more lively $11 billion. Yet that total for core retail sales growth lags the $17 billion increase in the same three months of 2014 when gasoline was much more expensive. Nevertheless, the latest acceleration in core sales is more promising.Core retail sales grew 4.6% annualized in the past three months, stepping up from the ...
