| From businessweek.com: Lower prices are welcome, but a global slowdown is a big part of the change, and that's no reason to cheer. These days, even the good news is bad news. The good news, which helped the stock market to its biggest gain in four months on Aug. 5, is that commodity prices, led by oil, have been plunging. The bad news is why commodities have fallen: One big factor is a slowdown in global economic growth, with prospects for worse ahead.
On the bright side, lower commodity prices, all else being equal, help hold down inflation and ease strains on consumers and commodity-buying businesses. Prices of oil, copper, aluminum, corn, and soybeans began dropping sharply earlier this summer, joining zinc, tin, nickel, and platinum, which began falling earlier. Crude oil fell 18% from its July 3 peak of $145 a barrel through Aug. 6, when it closed at $118.60 on the New York Mercantile Exchange. Nickel is down 47% from its 2008 high; orange juice, down 33%; platinum, down 30%; soybeans, down 26%. Overall, the S&P GSCI—a global commodity index created by Standard & Poor's (MHP) and Goldman Sachs Group (GS)—is off 19% since early July...... Full Article: Source |