NEW YORK (TheStreet) -- I was talking with Joe Deaux about the general weakness of many commodity prices and whether it is giving an indicator of bad global growth to which we need to pay attention.
If you think about the worst-performing stocks for the past several years, many of them turn out to be commodity stocks, particularly coal and copper stocks. On a list of horrible performers you'd have Peabody (BTU), Alpha Natural Resources (ANR), Vale (VALE) and Freeport-McMoRan (FCX), among others. That's normally been a sign of a contracting global economy, and I cannot remember another time when we've had strong and sustainable growth without a robust commodity market.
Commodity weakness, and particularly base metal weakness, is nothing new, and yet the stock market has done fantastically well in the last two years. Many have believed the much of that strength has been attributable to the Federal Reserve's quantitative easing. But now that the tapering of QE is not just a prospect but a reality, it might perhaps be time to listen to the commodity markets again.
The picture they paint is not a pretty one, especially for the emerging markets. Copper prices that have consistently hovered just above $3 a pound have described weakness in China and other Asian markets long before recent weak PMI reports signaled a slowing of GDP growth there. That emerging-market weakness has been blamed for the recent selloff in our own stock market.
But continued low prices for coal and other base metals make me question whether this selloff is just a correction, as many market analysts think, or a more serious symptom of a deeper problem in the global economy.