Commodities are through the roof. Stocks are falling.
It wasn’t caused by Russia invading Ukraine.
I went back and checked the charts. Trends started between NOV, 2021 and JAN, 2022.
Stocks Down Hard
The Dow and the S&P hit their highs in early January. As of this writing, March 07 trading closed down hard.
During Monday’s trading…
DJI dropped 797.42 (-2.37%)
S&P 500 Index lost 127.78 (-2.95%)
Taken from their January highs…
DJI is off 11%.
S&P is down 12.5%
NASDAQ in Recession
The tech-heavy NASDAQ traded above 16,000 in November.
It includes the famous FAANG stocks… Meta (originally Facebook), Apple, Amazon, Netflix, and Alphabet (Google).
Some of those had already been misbehaving, so the stage was set.
FB, for example, dropped from 382 in September to 187 yesterday, March 07.
Moderna was 484 in August, closing at 126 on March 07.
NASDAQ trading was ugly on March 07, losing 482.48 to close at 12,830.96 (-3.62%)
That exceeds a 20% drop since November, putting the NASDAQ into recession.
Pretty much everything was in the red, except the Energy Sector. And Energy stocks benefit from insane commodity pricing.
Commodities Are Out Of Control
Trading, worldwide, is careening around, trying to find a price. We’re seeing record price swings… Brent Crude traded across a $20 range in a single day. And record price moves… Nickel jumped 82% in one day of short-squeeze misery.
Wheat has traded limit-up several days in a row, putting it at a 14-year high. This underscores concerns of impending food shortages around the world. And that’s further compounded by trade disruptions and insufficient fertilizer supplies.
There’s a lot at play, here. I’ll try to address more in another post.
This is going to be a mess. The Biden Inflation is well underway. Certainly, the attack on Ukraine roils today’s commodity markets. And that assures even higher prices in the future. Shortages are likely.
So, the car you can’t buy today won’t be any more available in the future. But it will cost, say, another $1,000.
I’m guessing that some companies will delay some hiring, as a precaution. Others may suffer slow downs from availability, price, or supply chain issues.
Oil and Gas is clearly the strongest sector.
However, Team Biden actually wants oil and gas to be a problem, hoping we’ll substitute windmills and batteries.
I don’t see producers willing to take large risks, just to solve problems that the President finds useful.
This will cause churn, increasing hiring hesitancy versus critical demand.
That ensures we’ll have candidates and openings.
Swell for recruiting.
Not a fun way to run a country.