Here's Why Renewable Energy Group Dropped Over 10% Today
Shares of Renewable Energy Group (NASDAQ: REGI) fell as much as 11% today as investors digested the economic briefing given by the Federal Reserve yesterday afternoon. Although there are many moving parts and much uncertainty in economic projections right now, the nation's top economists predict it will take years to undo the damage from the coronavirus pandemic. The sobering outlook is weighing heavily on stock markets and commodity prices that had been rising higher in recent weeks.
Renewable Energy Group is particularly dependent on commodity markets. It is the nation's top producer of biomass-based diesel fuels, and low crude oil prices and reduced demand for distillate fuels will certainly hurt the business in 2020 and 2021. So, too, will rising feedstock prices and concerns over shortages. Considering major crude oil benchmarks were down over 7% today and small-cap stocks touched all-time highs earlier this week, it's not too surprising shares are cooling off today.
As of 12:21 p.m. EDT, the renewable fuels stock had settled to a 10.7% loss.
Source Fool.com
