Mar 2, 2020 - Economy & Business

Commodity prices sink on fears of decreasing global demand

Expand chart
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

Go deeper

Stocks plunge 7% at close of Wall Street's brutal day

Photo by Spencer Platt/Getty Images

U.S. stocks closed more than 7% lower on Monday, after a wild day for the stock market that saw a rare halt in trading.

Why it matters: The sell-off reflects serious fears that the oil price drop and the coronavirus could throw the economy into a recession.

Go deeperArrowUpdated Mar 9, 2020 - Economy & Business

Coronavirus outbreak has likely already pushed multiple countries into recession

A trader at the New York Stock Exchange on March 5. Photo: Michael Nagle/Xinhua via Getty) (Xinhua/Michael Nagle via Getty Images

Benchmark U.S. 10-year Treasury yields fell to under 0.5% with the 30-year below 1% for the first time ever, oil plummeted by as much as 31%, Australia's ASX index lost 7.3% (its worst day since the financial crisis) and markets in Asia and Europe cratered.

What happened: The economic shock of the coronavirus looks set to worsen as more places around the world, including the U.S., may institute quarantine measures that would severely reduce consumer activity.

Trump to buy oil for nation’s strategic reserves

President Trump. Photo: The Washington Post / Contributor

President Trump will direct the Energy Department to buy oil for the nation’s strategic stockpile to boost prices and help the oil industry reeling after the market’s historic collapse this week.

The big picture: America’s Strategic Petroleum Reserve was created in the 1970s to ensure the U.S. has oil in case of an emergency. Today, Trump is buying oil for the reserve because of an emergency.