Mar 2, 2020 - Economy & Business

Commodity prices sink on fears of decreasing global demand

Data: FactSet; Chart: Axios Visuals
Data: FactSet; Chart: Axios Visuals

The coronavirus outbreak has sparked one of the worst routs in commodity prices in years, the Wall Street Journal reports.

Why it matters: Investors are now bracing for even steeper declines — a warning signal about the state of the global economy.

What's happening: Commodities have been among the hardest hit investments since the outbreak began spreading around the globe.

  • Oil prices have fallen 32% in less than two months and last week recorded their worst week since the financial crisis. Industrial metals from copper to aluminum are also taking a beating, Ramkumar notes.

The big picture: Commodity prices can provide a real-time indicator of activity, and "the current slide reflects slumping demand and bloated inventories."

  • Plus, "some investors worry the widespread selling of assets associated with risk also portends more pain ahead for stocks."

Go deeper: The growing coronavirus recession threat

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