We fully acknowledge that there is a major recession in the oil and basic material sectors affecting certain states, but the collapse in oil prices is driving vehicles sales to records and boosting consumer demand – as it tends to do when the reason for the collapse is excess supply rather than falling demand.  The chart below (Page 2) depicts both supply and demand for oil, and the bottom panel shows the surplus or deficit.  One can see clearly that the surplus that has built up since 2014 is far larger and more persistent than any surplus seen over the past 30 years, but also that demand continues to rise.  In our view, we see no sign of a collapse in demand that would indicate a recession.  Some analysts have suggested that continued declines in the price of oil could trigger recession through oil company bankruptcies and collapsing growth in commodity-dependent emerging economies.  As discussed in greater detail in our Strategic View dated January 26, 2016, we are sceptical that the oil industry’s debt or employment levels are large enough to offset the tremendous benefits consumers receive from lower oil prices.  We further believe that what emerging economies need most is a healthy China and that low oil prices are greatly aiding China’s transition to consumption led growth.

David Fuller's view

Here is The Weekly View.

This makes sense to me, although I still maintain that we are in for a bumpy ride. 

I think subscribers will be very interested in the rest of this report from RiverFront.