By Jeff Fichtelman, partner in JP2 Risk Management
If you polled the average American, most would agree we are likely to enter a recession. Thanks to the loose monetary policy from the Fed and the White House, we are now dealing with rapid inflation. This inflation has increased corporate costs, reduced their margins and is hurting consumer’s ability to spend. What does this translate to? Lower revenue and income for many corporations and therefore lower stock prices.
Why should the U.S. farmer care about the stock market? In most cases, the price of corn and soybeans move independent to fluctuations in equities. However, in those rare circumstances that the equity market is “in free fall” all markets suddenly move together. In the 2008/09 recession, the stock market fell 20% while corn and bean prices actually went higher. Then, equities fell another 30%, which ended up dragging corn and bean prices down sharply.… Continue readingRead More »