Traders get nervous as crude oil closes at new highs. Oil over $80 for the first time in a year has stock traders talking, worried that higher commodity prices would again be a burden to consumers.
Peter Boockvar and other traders have noted the big move in commodities this month:
1) gasoline and crude futures today rising to a one year high
2) corn near 4 month highs
3) wheat at a 2 month high
4) soybeans near 2 month highs
5) sugar near a 28 year high
6) cocoa at a 30 year high
The average gallon of gasoline is at a 7 week high at $2.60, just $0.10 away from a one year high.
While high commodity prices might be a big help to commodity stocks, and the weaker dollar is a big help to multinationals, it is a major headwind for other stocks if it continues.
High commodity prices mean those companies that are U.S.-based and more dependent on consumers will see their top line and their margins erode.
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