Thursday 5 May 2011

Price of commodities take a nosedive - and puts the financial market on the edge!

OK, I know I keep talking about commodities, incease tax on oil and gas and Glencore's new investors but today was the biggest drop in the cost of raw materials in almost two years!


 Well, how does this effect us and companies?
Cheaper petrol for us? Prices will take a while to feed through to motorists, but drivers will start to see the price of petrol at the pump reduce if the fall is sustained (yay!).

Myrto Sokou, of Sucden Financial, put the reason for this down to "renewed concerns about oil demand in China and the US, while the weak US dollar failed to provide some support to the market".


 OK so commodities are down but how is it effecting the market?

The fall in commodities and the increase in unemployment claims dragged the market down (New York). Unemployment rates are only increasing in America and investors are getting worried.

Who cares about the US and what is happening there? If it's affecting the stock market, then it will affect us! It will affect companies on a global scale and that is why we need to know what is happening. In afternoon trading, Exxon Mobil and Chevron were down by 1.7% and 1.3% respectively (painful!). These are big international companies, so this is not just an isolated matter to the US.



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