The Washington City Times’s Jim Cramer said on Thursday that markets seem less concerned about the raging price rises of a range of commodities, from metals to wood.
“I have good news for you: the stock market, which is quite correct in these matters, says that commodity inflation has already peaked,” said the host of “Mad Money”. “Forget temporarily, the market says it’s pretty much over.”
Cramer pointed to widespread declines in a number of commodity-linked stocks, such as Freeport-McMoRan. Copper miner shares plunged more than 5% on Thursday and fell about 20% in the past month.
“Sure, the market could be wrong, but if you’re concerned about inflation gone completely out of control, that possibility has been brushed aside,” Cramer said. “You’re looking at a sudden collapse of every commodity related stock as long-term interest rates crash — that wouldn’t happen in a world of wild and crazy inflation.”
The Dow Jones Industrial Average fell again on Thursday after the Federal Reserve’s policy meeting and the release of its updated interest rate forecast. In the S&P 500, four cyclical sectors — industrials, materials, finance and energy — finished in the red on Thursday, with technology taking the biggest win.
“The buyers and sellers have spoken. They think… [Fed Chairman] Jay Powell means business, but not in the short term, and the topic of hyperinflation … is now off the table, where it should have always been,” Cramer added.