Stocks and commodities are getting crushed

Stocks are in the red on Thursday, as commodities across the board get slammed.

Copper and gold fell to new multi-year lows, while crude oil fell below $US42 per barrel for the first time in two and a half months.

And near 3:34 p.m. ET, stocks were at the lowest levels of the day, with the Dow down 217 points, the S&P 500 down 23, and the Nasdaq down 45. The S&P 500 went negative year-to-date.

After falling to a five-year low on Wednesday, gold slipped even lower, and was down nearly 1% to as low as $US1,073.40 an ounce.

Copper fell to a new six-year low of around $US2.16 per pound.

Crude oil fell 2% to as low as $US41.70 per barrel. Data from the Energy Information Administration showed that US oil inventories rose for a seventh straight week, by 4.2 million to 487 million barrels.

In their latest global outlook to clients out Thursday, Barclays economists wrote about commodities:

Although we do not expect any further significant declines in oil, copper or gold prices, the prospect of the type of v-shaped rebound that has characterised recent recoveries looks slim. The bottom has probably been reached, but the stay in a markedly lower range is likely to prove a long one.

They noted that the drop in commodity prices has been due to a combo of slowing Chinese demand growth, an increase in supply, and a strengthening dollar.

They also pointed out that the recent downturn in commodity prices since 2011 was just as bad as those that happened during previous periods of global economic crisis. (That’s not to say they think the global economy is on the brink of crisis right now).

Meanwhile, markets are listening all day to comments from five FOMC members, including Fed chair Janet Yellen. These will be closely parsed for comments on monetary policy, the economy and labour market, especially after last Friday’s strong jobs report, and what all this means for a possible interest rate hike next month.

New York Fed president William Dudley said, “I think it is quite possible that the conditions the Committee has established to begin to normalize monetary policy could soon be satisfied.”

In economic data, initial jobless claims last week were unchanged from the prior period at 276,000.

And, job openings rose to 5.5 million in September, beating forecasts, while hiring fell to 5.05 million from 5.08 million. The quits rate, which gauges workers’ confidence in finding new jobs, was 1.9% for a sixth straight month.

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