Trump’s trade war with Rwanda over used clothes Wall Street might not be freaking out about the trade war between China and the United States, but serious cracks are forming in the commodities market.
Check out copper, the industrial metal that’s so sensitive to swings in the global economy that it’s affectionately known as Dr. Copper. The price has plunged 16% over the past month and hit a one-year low on Wednesday.
Iron ore, another critical metal, has dropped 11% this year. Zinc hasn’t been this cheap since mid-2017. And a Bloomberg index of industrial metals including aluminum and nickel closed on Wednesday at the lowest since August 2017.
“Copper and other metals are reflecting concerns about a global slowdown — created by tariffs,” said Kristina Hooper, global market strategist at Invesco. “We are in a trade war that is being fought on multiple fronts.”
And then there are soybeans. China, the world’s largest consumer of American soybeans, imposed a 25% retaliatory tariff on the crop last week.
“If you lose your biggest customer, what do you think is going to happen to prices?” asked Peter Boockvar, chief investment officer at Bleakley Advisory Group.
Contrast the commodities crash with what’s going on in the stock market.
The S&P 500 has jumped more than 2% this month, and the highflying Nasdaq has soared 4% to a record high on Thursday. The