New York crude oil futures for October plummeted 4.31% to $65.75 per barrel,hitting a new low in 15 months.

Brent crude oil futures for November fell by 3.69%,reporting at $69.19 per barrel,a new low in 32 months.

The significant drop in oil prices has not only cast a shadow over the global economy but also added gloom to the recent trend of A-shares.

In the past two months or so,New York oil prices have dropped by nearly 22%!

Influenced by this news,U.S.crude oil stocks such as Exxon Mobil have plummeted.

The world's largest market value crude oil stock - Saudi Aramco - has performed even worse.

China's largest market value crude oil stock - PetroChina - fell by more than 3.5% this morning,and the recent trend is as follows: What triggered the international oil price plunge?

What impacts will it bring?

Will A-shares hit a new low?

The recent economic data from the United States,as well as the expectation of interest rate cuts by the Federal Reserve,can be seen as significant causes of the oil price drop.

The employment data for August in the United States was recently released,and the situation was worse than expected.

This almost raised the possibility of a rate cut in September to 100%.

Some may ask: Isn't an interest rate cut a measure to stimulate the economy,and isn't it good for oil prices?

In the medium to long term,interest rate cuts are beneficial for stabilizing oil prices and the economy.

However,in the short term,the decline in U.S.economic data has led the market to worry about a global economic downturn.

For example,Wall Street sees a 50 basis point rate cut by the Federal Reserve in September as a significant short-term bearish factor,and believes that a 25 basis point cut would be better.

The main reason is that U.S.asset prices have performed too well previously,with everyone making a fortune.

Although everyone knows that the economy cannot withstand high interest rates for long,if the Federal Reserve cuts interest rates too quickly,it will trigger a strong perception of economic recession,and everyone will take profits.

Although the capital market has always been about speculation,interest rate cuts by the Federal Reserve can help the economy out of the trough,but that may be a matter of 1 to 2 years later.

Even if interest rates are cut three times within the year,the interest rates are still high,and the inertia of the economic downturn will continue for a while.

The big players on Wall Street have always been good at using "news" to create price fluctuations,and they certainly won't miss the opportunity at hand.

Only when prices fluctuate can there be opportunities to "mow the leeks"; the greater the fluctuation,the richer the harvest.

They will definitely create a panic of economic recession at the beginning of the Federal Reserve's interest rate cuts!

Moreover,the economy is indeed in recession.

Why did Canada cut interest rates three times before the United States?

Why is the European Central Bank likely to cut interest rates for the second time this week?

It's all because the economy can't hold on,and interest rates are too high.

Under such circumstances,international investment banks have successively lowered their forecasts for global crude oil demand this year and next year.

For example,OPEC (Organization of the Petroleum Exporting Countries) reported on Tuesday that it has reduced the global daily demand for crude oil from 2.11 million barrels to 2.03 million barrels this year; and from 1.78 million barrels to 1.74 million barrels for next year.

Morgan Stanley,Goldman Sachs,and Citigroup have similar forecasts.

Only war can make the international oil price struggle a few times in the next year.

For example,the Ukraine-Russia war,conflicts between Israel and neighboring countries,etc.

But this impact can only be short-term and pulse-type,unless a world war breaks out.

The decline in oil prices has triggered a drop in the stock prices of PetroChina,Sinopec,and CNOOC,among which the decline in PetroChina's stock price is the most eye-catching.

From mid-January to the end of April,PetroChina experienced a magnificent rebound,with its stock price reaching a new high in 8 years.

During that period,international oil prices only rose slightly,not significantly.

The basic logic supporting PetroChina's surge was not the rise in oil prices,but the bailout and rebound of A-shares.

At that time,the Shanghai Composite Index once fell to around 2635 points,and the national team intervened to rescue the market.

In terms of macro policy,there was a double reduction in the reserve requirement ratio (0.5 percentage points) and a significant LPR interest rate cut (a 25 basis point cut in the 5-year term).

The national team's intervention could not buy stocks of private enterprises with high valuations,which could pose a risk of interest transfer.

The national team could only buy ETFs or state-owned enterprise stocks,such as Bank of China and PetroChina.

And "China's special valuation" (establishing a valuation system with Chinese characteristics) is also a major goal of the current capital market.

This goal,translated into plain language,is that state-owned enterprise stocks in A-shares have been discriminated against and undervalued for a long time.

The first goal of China's special valuation is to restore the refinancing ability of state-owned enterprise stocks.

Therefore,this year,the performance of state-owned enterprise stocks such as large banks and large oil companies has been good.

But recently,these stocks have been adjusted.

Why?

First,they have risen too much,and no one is following the rise.

The funds of the national team are not unlimited,at least for now.

When approaching full position,there is a choice: what to do next.

Due to the insufficient counter-cyclical adjustment strength,coupled with the economic recession after continuous interest rate hikes in Europe,the United States,and Japan,the national team may have made such a judgment: it is necessary to retreat slightly and redeploy the defense line.

It is important to know that the call for a reduction in existing mortgage rates is getting higher and higher,and if it is implemented,it will further reduce the interest spread and profits of banks,which is bearish for bank stocks; the decline in international demand also constitutes a bearish factor for the three oil companies.

It is better to retreat first and reorganize the defense line instead of holding on at a high position.

Therefore,we have recently seen a general adjustment of state-owned enterprise stocks,and large banks and the three oil companies are even more so,driving the Shanghai Composite Index to retreat to the 2700 defense line.

What will happen next?

Whether to increase the reinforcement (funds) for the national team,or only rely on "reducing reserves + interest rate cuts" to help,remains to be seen.

In short,the decline in international oil prices has had a dragging effect on the A-share market.

As for when A-shares will emerge from the adjustment,there are still many uncertainties,depending on the next policy strength and economic trends.

Today,there is also one thing worth noting.

The "Securities Daily" under the "Economic Daily" of the central media,with most of the page,published a reporter's commentary titled "The call for 'interest rate cuts' on existing mortgages has risen again,how does the banking industry answer the 'multiple-choice question'".

It first mentioned "there are rumors in the market that the relevant parties are considering further reducing the interest rates on existing mortgages",and then analyzed "what impact does the interest rate cut on existing mortgages have".

Does this mean that the possibility of interest rate cuts on existing mortgages has increased?

Everyone can see the wisdom.

At least,the central media did not refute the rumors.