"Ex-energy" dominated the market's lexicon as Wall Street experts dismissed the earnings and manufacturing recession, rising defaults in the corporate bond market and the general inability of the economy to grow beyond the low 2 percent range. As long as energy was excluded, and the sector's transitory effects abated, the U.S. economy, corporate America and the financial markets were in fine shape, the thinking went.
However, the script could be changed in 2016. Energy, it seems, can't be isolated, even though it indeed directly contributes only about 6 percent of gross domestic product and makes up about 6.5 percent of the S&P 500.
If the decline in energy prices isn't just "transitory," as Fed Chair Janet Yellen insists, but is rather symptomatic of a global slowdown that starts with China, the world's second-largest economy, that substantially changes the equation.
"You can't just take out energy (because prices are low). You've got to adjust for a variety of industries that have benefited from low energy prices," said Peter Boockvar, chief market analyst at The Lindsey Group. "If oil is the lifeblood of the U.S. economy in terms of transportation and heating and all that, how do you take out the lifeblood of the economy and 'say, oh yeah, it doesn't count'?"
However, Boockvar doesn't necessarily subscribe to the argument that the problems in the U.S. have been triggered primarily by China, which accounts for just 0.5 percent of total U.S. exports.
Coincidentally or not, the domestic slowdown ties in directly with the end of the Fed's quantitative easing, a money-printing program that exploded the central bank's balance sheet by $3.7 trillion. Since QE ended in October 2014, U.S. stocks have gone nowhere, manufacturing has contracted and corporate profits have come to a screeching halt.
More recently, Wall Street economists have been rushing to write down their estimates for growth in the last three months of 2015. A government report Wednesday showed, that exports, which comprise about 12.5 percent of GDP, hit a nearly four-year low.
On top of that, the early year turbulence has hit the U.S. in the solar plexus of its growth, namely the asset bonanza that the Fed's QE fueled. Even with the 2016 sell-off, the S&P 500 is up about 200 percent from the March 2009 low.
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"We're in an asset price-dependent economy. Just a decline in asset prices is enough to cause a recession," Boockvar said, adding that the consumer will be "the wild card."
Though expectations for the fourth quarter are for growth in the sub-1 percent range, most economists believe 2016 will bring GDP gains at about a trend rate. Continued trouble from China, though, would change that and, while perhaps not triggering a technical recession of two consecutive quarters of negative growth, still could cause considerable damage.
"Even if we don't go into a recession this year, you can have low 1s (percent GDP growth)," Boockvar said. "While that is not technically a recession, it's certainly going to feel like one."
What it all comes down to is more trouble for the Fed.
The U.S. central bank raised its key funds rate from near zero for the first time in more than nine years a month ago, and officials have been indicating four more hikes could be on the way this year.
If the Fed holds to those plans — the market now is pricing in only two or three hikes — that could add to the China problems as the U.S. dollar strengthens and pressures multinational companies.
In fact, Dan North, chief economist at Euler Hermes, said that rather than the U.S. "importing" a recession from China, the Fed actually may be exporting a recession through policy error.
"They're trying to reverse these conditions of the zero bound, which was in place for much too long," North said. "They got painted in a corner and they're trying to reverse that. These are the effects."