Changes inordinary commodity prices have an important impact on the stock market.Specifically, when prices rise, stock prices rise; when prices fall, stockprices also fall. Specific analysis of the impact of commodity prices on stockmarket prices is mainly manifested in four aspects:
①Whencommodity prices increase slowly but not too much, and the price increase rateis greater than the increase rate of the borrowing interest rate, at this time,the price of the company's inventory of goods increases. Because the productprice increases more than the increase in the borrowing cost, the companyProfits will rise, and stock prices will rise as a result.
②Commodityprices have risen too much, and stock prices have not risen accordingly, butmay fall instead. This is because rising prices have caused the company'sproduction costs to rise, and the rising costs cannot be completely passed onthrough commodity sales, which reduces the company's profits and the stockprice.
③When pricesare rising and commodity market transactions are prosperous, sometimes whenstock prices are sinking, people are keen on spot consumption, which makesstock prices fall; when the commodity market rises and falls, it becomes thebest time to invest in stocks. This caused the stock price to rise.
④Pricescontinue to rise, which has increased investors’ awareness of valuepreservation, so that investors withdraw funds from the stock market and investin movable or real estate, such as real estate, precious metals, and otheritems with strong value, which will reduce the demand for stocks. Thus, causingthe stock price to fall.