On Thursday, the Street was again focused on commodities with investors trying to make heads or tails of the recent moves.
"Commodities have had a great run-in here. We are just going to get some volatility going forward, both in the up direction and down direction," says Wayne Schmidt, chief investment officer at Gradient Investments in a Reuters interview.
Of all the potential ripples, pros are particularly focused on energy equities, which have dictated the tone of the market in recent days. The sector has tumbled 7.9 percent this month after it gained 16.3 percent in the first quarter.
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Trader Pete Najarian is cautiously optimistic. “(Although) the market has been dictated by energy equities we’re not seeing devastation in other sectors such as healthcare and tech,” he says.
Also action in the Vix suggests we’re not seeing fear snap back in the market.” Najarian expects those catalyst will ultimately prevail and send stocks higher. “We’re closing higher, volatility is telling you that,” he says.
Tim Seymour thinks the trade is all about the dollar. “We’ve put the lows in on the dollar,” he says, “next it crunches higher." If he’s right, that’s a problem for commodities nominated in dollars because dollar strength makes them more expensive to buyers using other currencies. Although he didn’t say it outright, that could presents headwinds for equities.