Not only are investors selling oil and gold these days, they are also selling many other commodities. The CRB Index, which tracks a broad basket of commodities, has fallen 12% this year. The following charts paint a clear picture of the carnage.
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1. Coffee Tops FOXBusiness.com's Least Loved Commodities List
Gold and oil may be stealing the headlines but investors are cashing out of other commodities just as fast....
2. Coffee, Sugar and a Bear Market
Lots of people like sugar in their coffee....turns out the two are also in a tandem bear market with losses of over 30% a piece during the past year. Brazil, which is the largest producer of arabica coffee and a huge exporter of sugar, has seen its currency fall to a 12-year low. Traders suggest farmers are racing to sell their crops to capture the strength of the U.S. dollar against the Brazilian real as reported by Agrimoney.com.
3. Metals Malaise: Yearly Lows for Gold, Copper
Gold can't catch a break. While the strengthening greenback continues to pressure the shiny metal, the absence of inflation has driven the price down 15% during the past 12-months. Inflation continues to trend near zero, below the Federal Reserve's preferred level of 2%. In the July statement, policymakers noted "The Committee continues to monitor inflation developments closely."
As for Copper, the outlook is not much better. The industrial metal, viewed as a barometer of global growth, is getting hammered on the view that China's economy is slowing. It has lost nearly 30% of its value over the past 12-months. Complicating matters, China's Manufacturing Purchasing Managers' Index slipped to a reading of 50 in July down slightly from June, according to data released earlier this week from the National Bureau of Statistics of China.
4. With Oil in Freefall, Few See a Bottom
Oil's 50%+ demise during the past year has been widely telegraphed. With oil hovering around the $46 a barrel level, prices at the pump are down as well averaging $2.65 per gallon, the lowest level since 2009 according to AAA. By saving on fuel costs, consumers may have more money to spend elsewhere which is good for the U.S. economy.
The flip side of this story is there are less energy jobs as a result. Schlumberger (SLB) has announced about 20,000 job cuts this year. Just last week Royal Dutch Shell (RDS.A) said it will cut 6,500 workers and Chevron (CVX) 1,500.
5. Money Flows Out of Commodities and Into U.S. Stocks and the U.S. Dollar
Investors are selling commodities in favor of U.S. dominated assets. The S&P 500 is up about 2% this year while the U.S. dollar has gained over 11% against vs. the euro.
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