Stock prices have now seen the shine of profit in recent days. There are still some products which have not been able to catch up and struggling with the loss. According to market analysts, this might lead to a loss for the investors. The stock prices of S&P 500 have increased since 29th October 2018. There has been rising in the prices by 6%. The news is not so good for products which fall under the category of gasoline, platinum, copper and oil. The share prices of these goods have slumped by 20%. Lower product price is considered an indicator of slow economic growth. The main reason for considering product prices as an indicator of economic growth is, commodities are used for building infrastructure and creating power for the machineries and cities.
According to Komal Sri Kumar, the President of the Sri Kumar Global Strategies, global economy is slowing down due to the decline in the product prices. He thinks the equity prices of the goods will not improve by itself. The reasons for such low product prices are higher dollar rates, disputes among countries regarding international trade and the weak overseas market. The Federal Reserve has followed a strict monetary policy this year. It has already increased the rates thrice in this financial year and is supposed to raise it one more time before the year comes to an end. The higher the rates, the more expensive are the commodities. This is because as the rates rise, storing the products become more expensive. The high price of the dollar has just not affected the imports, but the US- manufactured goods have also faced challenges. According to Ilya Feygin, who is the senior strategist of Wallach Beth Capital, informed that amongst all commodities, metals have suffered the most. Economists feel that the growing trade tensions between Washington and Beijing can worsen the condition.