For now, oil price volatility is the main factor

THE rebound in oil prices is most probably the reason the S&P 500 on Friday closed at a new all-time high of 2,096, while the Dow Jones Industrial Average managed a 1.1 per cent gain over the week, its best weekly performance in two years. The Nasdaq Composite, in the meantime, is at a 15-year peak.

It follows, therefore, that at least as far as Wall Street is concerned, much would depend on whether the rise in oil prices will continue in the holiday-shortened week ahead.

Of course, the rebound in US stocks could very well be because it is the default repository for big money. The US market has regularly been described in this column as the world's default safe haven and investors, secure in the knowledge that the US Federal Reserve will bail out Wall Street with limitless money-printing at the first sign of trouble, will always buy the dips there. So whether or not oil's rebound is really the current driving force remains to be seen, but for now, that is the most popular explanation.