MW: Commodities Prices Jumping, Pushing Ag, Metals, Energy Stocks Higher
By Dave Kansas
Commodities prices are shooting higher again this morning, giving a boost to oil companies, agricultural plans and miners and metals stocks. It?s also stoking concerns about the inflation bogeyman.
With first-quarter earnings starting to roll in next week, inflation issues are likely to get a more robust airing. Several Fed officials are speaking this week, and their recent public debate about the fate of the current quantitative easing program (due to end in June) is likely to get livelier.
Meantime, commodities investors keep pushing prices higher. Oil prices are crowding $108 a barrel in New York and are up near $120 a barrel in London. Corn, oats, soybeans and wheat are all trading higher in Chicago. Gold, silver and copper are all higher in New York.
The collection of rising prices is boosting a raft of commodity-related stocks. Energy: BP, Marathon Oil, ConocoPhillips and Occidental Pete are higher. Food: Mosaic, CF Industries, Monsanto and DuPont are up. Miners: BHP Billiton, Rio Tinto, Newmont Mining, Barrick Gold and Freeport McMoRan Copper & Gold are gaining.
Not everything is heading higher in the commodity complex. Oil giants ExxonMobil and Chevron, both Dow components, are struggling to reach higher ground.
Commodity price gains, especially among food and energy, will likely help drive the inflation discussion this week. Also, on Thursday, the European Central Bank is expected to raise short-term rates for the first time since it lowered them to record lows in the wake of the financial crisis. That will focus minds on what the Federal Reserve plans to do.
The X factor for the Fed remains wage inflation. While Friday?s March jobs report was solid, it showed little-to-no movement in wages. Since the core Consumer Price Index excludes food and energy, expect the dominant Fed voices, such as Big Ben Bernanke, to remain a bit dovish.
