Oil is the most visible driver of the market and is a symptom of slower growth, and a cause of financial risk. Oil is down not due to the dollar, but due to demand not growing to meet increasing supplies. The dollar strength right now is more a function of relative economic strength, which encourages foreign investment and savings in the US, and buoys interest rates, relative to negative rate Europe. Oil's decline could drive down the dollar next year as Saudi Arabia and other oil producers cash out more dollar denominated savings to fund national social policies.
The supply issue is driven by US, which has increased oil production almost 5 million barrels a day and Saudi Arabia is producing almost 3 mm barrels above their baseline from 2009. Iraq has increased production to prewar levels and Russia is producing flat out. Capital pullback is slowly reducing production, but producers have debts or national social expenditures to meet and keep producing at full capacity to pay the bills. The gradual pullback in production is also being countered by increased fuel standards in the US and China, which are the two largest consumers with about 20% of the global market. As China deals with their pollution, coal and oil will be targeted for a declining share of total energy production, putting a long term cap on prices for oil globally. The coal decline is mostly hurting Australia and some sectors in the US. Oil's decline is causing a downturn in Canada, which could have a secondary impact on their housing market and wealth affect spending reductions. Oil is also contributing to recessions in Russia, Venezuela, Saudi Arabia and other countries that depend on them for trade or support, which has impacts on exports from Europe, the US and other major manufacturers.
The major systemic risk in the US, Europe are more financial, as we wait to see which oil producers go bankrupt. Many producers were not cash flow positive at $40 a barrel, and won't be able to cover interest payments at this level. Venezuela seems to be the only country in default territory, but Saudi Arabia and other middle east countries will have to make hard decisions about social support policies in 2016, or risk depleting national savings that were built up over decades, in the next 2-3 years. Ironically, social unrest and potential impact to production is potentially the nearest term driver to increase prices, barring conflict between Iran and Saudi Arabia.
Those are my thoughts on the current drivers anyhow. Not sure what can change the decline in oil at this point, but any trend that can't continue; won't. Producers will need to agree to cuts, or storage and ships won't have room for more capacity. That would cause a final fall and drive capitulation of the high priced least capitalized producers.
How all of this impacts Tesla and TSLA is yet to be seen. Elon's commitment to making a better car, rather than a different car is what has made the difference to date. I think it will make Tesla the Apple of the auto industry, with best in class margins, but it is going to take the next 2-3 years to really prove as the Model 3 competes in a more price conscious segment.